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Determine the process to compare alternatives on an equal basis and select the alternative that is wisest from an economic standpoint?
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Solved in 2 steps
- No hand written solution and no image availableAnswer the c and d optionsWhen evaluating possible alternatives, consumers should look for (a) the highest quality alternative (b) the alternative with the greatest net benefit (c) the alternative that has the lowest price (d) the alternative that is most frequently chosen by others.
- Solve ONLY D and E !!! A school is overcrowded and there are three options. The do-nothing alternative corresponds to continuing to use modular classrooms. The school can be expanded, or a new school can be built to "split the load" between schools. If a new school is built, there are more benefits because more students will be able to walk to school, the average distance for those who ride the school buses will be shorter, and the schools will be smaller and more "student friendly". The disbenefits for the expanded school are due to the impact of the construction process during the school year. The interest rate is 8%, and the life of each alternative is 20 years. Which alternative should be selected? What is the incremental ratio for the preferred alternative? Expand New School User benefits ($M/yr) 2.1 3.1 User disbenefits ($M) 0.8 First Cost ($M) 8.8 10.4 O&M ($M/yr) 0.95 1.7 a) Use the benefit-cost ratio b) Use the modified benefit-cost ratio c) Use the public/government version…which quote best represents a person performing a cost-benfit analysis?The great expert Hand written solution is not allowed Give explanation of the correct option and explanation of the incorrect options