Two relatively inexpensive alternatives are availablefor

Chapter 9, Problem 9.31

(choose chapter or problem)

Two relatively inexpensive alternatives are availablefor reducing potential earthquake damage at atop secret government research site. The cash flowestimates for each alternative are given below. Atan interest rate of 8% per year, use the B/C ratiomethod to determine which one should be selected. Use a 20-year study period, and assume the damagecosts would occur in the middle of the studyperiod, that is, in year 10.Alternative 1 Alternative 2Initial cost, $ 600,000 1,100,000Annual maintenance, $/year 50,000 70,000Potential damage costs, $ 950,000 250,000

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