The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour of the grounds and animals, suitable for both routine enjoyment and educational purposes in classrooms. Survey data indicate that this will have either a neutral or positive effect upon actual zoo attendance. The Web site will be professionally done and have an initial cost of $325,000. Upkeep, refreshing the videos, and developing videos for scientific research and entertainment will cost another $80,000 per year. The zoo is expected to be in operation for an indefinite period; however, a study period of only 10 years for the Web site is to be assumed, with only a residual (salvage) value of $60,000 for the archival value being anticipated. Interest is 7%. An estimated 100,000 persons will visit the e-zoo in the first year, increasing by 30,000 each year, and they will receive, on the average, an additional $0.80 of benefit per visit when the new area is complete. Determine the benefit-cost ratio. (A) 1.06 B) 1.43 с 1.64 D) 0.97 E) 0.68

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour of the grounds and animals,
suitable for both routine enjoyment and educational purposes in classrooms. Survey data indicate that this will have either a neutral
or positive effect upon actual zoo attendance. The Web site will be professionally done and have an initial cost of $325,000. Upkeep,
refreshing the videos, and developing videos for scientific research and entertainment will cost another $80,000 per year. The zoo is
expected to be in operation for an indefinite period; however, a study period of only 10 years for the Web site is to be assumed,
with only a residual (salvage) value of $60,000 for the archival value being anticipated. Interest is 7%. An estimated 100,000 persons
will visit the e-zoo in the first year, increasing by 30,000 each year, and they will receive, on the average, an additional $0.80 of
benefit per visit when the new area is complete. Determine the benefit-cost ratio.
(A) 1.06
B 1.43
C
1.64
(D) 0.97
E) 0.68
Transcribed Image Text:The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour of the grounds and animals, suitable for both routine enjoyment and educational purposes in classrooms. Survey data indicate that this will have either a neutral or positive effect upon actual zoo attendance. The Web site will be professionally done and have an initial cost of $325,000. Upkeep, refreshing the videos, and developing videos for scientific research and entertainment will cost another $80,000 per year. The zoo is expected to be in operation for an indefinite period; however, a study period of only 10 years for the Web site is to be assumed, with only a residual (salvage) value of $60,000 for the archival value being anticipated. Interest is 7%. An estimated 100,000 persons will visit the e-zoo in the first year, increasing by 30,000 each year, and they will receive, on the average, an additional $0.80 of benefit per visit when the new area is complete. Determine the benefit-cost ratio. (A) 1.06 B 1.43 C 1.64 (D) 0.97 E) 0.68
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