For the two independent projects shown, deter­mine which, if any, should be funded at i = 10% per year using the B/C ratio method:


B/CX = (110,000 – 20,000)/(60,000 + 45,000)
= 0.86 Reject X

B/CY = (150,000 – 45,000)/(90,000 + 35,000)
= 0.84 Reject Y

Answer is (a)

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