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Two Alternatives Have Been Proposed for a Government Project

question 2

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Two alternatives have been proposed for a government project. The estimated costs associated with each alternative are given below. Use the modified B- C ratio method, with AW as the equivalent- worth measure, to determine which alternative should be selected at an interest rate of 3% per year.
$Two alternatives have been proposed for a government project. The estimated costs associated with each alternative are given below. Use the modified B- C ratio method, with AW as the equivalent- worth measure, to determine which alternative should be selected at an interest rate of 3% per year. \begin{array} { | l | c | c | } \hline & \text { Alternative I } & \text { Alternative II } \\ \hline \text { Initial cost, } \$ & \$ 1,250,000 & \$ 1,050,000 \\ \hline \text { Annualmaintenance, } \$ / y r & \$ 180,000 & \$ 125,000 \\ \hline \text { Annual benefits, } \$ / y r & \$ 550,000 & \$ 540,000 \\ \hline \text { Salvage value, } \$ & \$ 11,000 & \$ 9800 \\ \hline \text { Projectlife, years } & 28 & 28 \\ \hline \end{array} \begin{array} { | l | c | c | } \hline & \text { Alternative I } & \text { Alternative II } \\ \hline \text { Iritialcogt, } \$ & \$ 1,250,000 & \$ 1,050,000 \\ \hline \text { Arrualmaintenance, } \$ / y r & \$ 180,000 & \$ 125,000 \\ \hline \text { Arrualberefitg, } \$ / y r & \$ 550,000 & \$ 540 ,000 \\ \hline \text { 5alvage value, } \$ & \$ 11,000 & \$ 9800 \\ \hline \text { Project life, yearg } & 28 & 28 \\ \hline \end{array} \begin{array}{|l|c|c|} \hline&\text { Alternative I}&\text { Alternative II}\\ \hline \text { itial cost, } \$ & \$ 1,250,000 &\$ 1,050,000\\ \hline \text { nnual maintenance, } \$ / y r & \$ 180,000 &\$ 125,000\\ \hline \text { nnual benefits, } \$ / y r & \$ 550,000&\$ 540,000 \\ \hline \text { lvage value, } \$ & \$ 11,000& \$ 9800 \\ \hline \text { oject life. vears } & 28& 28\\ \hline \end{array}$ $\begin{array} { | l | c | c | } \hline & \text { Alternative I } & \text { Alternative II } \\\hline \text { Initial cost, } \$ & \$ 1,250,000 & \$ 1,050,000 \\\hline \text { Annualmaintenance, } \$ / y r & \$ 180,000 & \$ 125,000 \\\hline \text { Annual benefits, } \$ / y r & \$ 550,000 & \$ 540,000 \\\hline \text { Salvage value, } \$ & \$ 11,000 & \$ 9800 \\\hline \text { Projectlife, years } & 28 & 28 \\\hline\end{array}$ $\begin{array} { | l | c | c | } \hline & \text { Alternative I } & \text { Alternative II } \\\hline \text { Iritialcogt, } \$ & \$ 1,250,000 & \$ 1,050,000 \\\hline \text { Arrualmaintenance, } \$ / y r & \$ 180,000 & \$ 125,000 \\\hline \text { Arrualberefitg, } \$ / y r & \$ 550,000 & \$ 540 ,000 \\\hline \text { 5alvage value, } \$ & \$ 11,000 & \$ 9800 \\\hline \text { Project life, yearg } & 28 & 28 \\\hline\end{array}$ $\begin{array}{|l|c|c|}\hline&\text { Alternative I}&\text { Alternative II}\\\hline \text { itial cost, } \$ & \$ 1,250,000 &\$ 1,050,000\\\hline \text { nnual maintenance, } \$ / y r & \$ 180,000 &\$ 125,000\\\hline \text { nnual benefits, } \$ / y r & \$ 550,000&\$ 540,000 \\\hline \text { lvage value, } \$ & \$ 11,000& \$ 9800 \\\hline \text { oject life. vears } & 28& 28\\\hline\end{array}$

Understand dividend policies and practices.

Comprehend the tax implications and processes of stock splits.

Analyze financial statements regarding dividend capacities.

Know the timeline and effects of dividend declarations on stock prices.

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