Two alternatives, identified as X and Y, are evaluated using the B/C method. Alternative Y has a higher total cost than X. If the B/C ratios are 1.2 and 1.0 for alternatives X and Y, respectively, which alternative should be selected? Why?
What will be an ideal response?
Alternative X should be selected because the B/C ratio on the incremental cash flows between the two alternatives has to be less than 1.0
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