In the development of a publicly owned, commercial waterfront area, three possibleindependent plans are being considered. Their estimated costs and estimated benefits areas follows.IncrementconsideredIncrementalA (A-C)A (B-A)PlanAB$123,000 135,000 99,00012000Costs24000costsBenefits$ 139,000 150,000 114,000Incremental2500011000BenefitsВ-С1.131.111.15A (B C)1.040.916which plan should be selected?O AO Do nothingO B

B-C ratio = (Present value of expected return from the project / Present value of expected cost…

Answered: In the development of a publicly owned,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

In computing the B/C ratio, is the annual revenue counted as benefits? Please compute the B/C ratio of MEA 5 and show your solution (not in excel). and explain MARR=12%
3- Which of the following mutually exclusive projects is the best alternative using the incrementa cost/Benefit analysis with 8% discount rate? Alternative First cost, $ M&O costs, $/year Benefits, $/year Disbenefits, $/year Life, years Project 1 320,000 45,000 110,000 20,000 10 Project 2 750,000 15,000 200,000 40,000 30 Project 3 540,000 35,000 150,000 45,000 20
A county in Tennessee is considering the following public interest project. Initial Cost $22.5M Annual Maintenance Cost $525K EUAB $3.3M Given a useful life of 12 years and an interest rate of 4%, the benefit /cost ratio is _____________________. Group of answer choices 1.01 1.13 1.51 1.67 1.48
Don't provied handwriting solution.
A major equipment purchase is being considered by Metro Atlanta. The initial cost is determined to be $1,000,000. It is estimated that this new equipment will save $100,000 the first year and increase gradually by $50,000 every year for the next 6 years. MARR=10% a. Using Benefit- Cost analysis, what is the Benefit/Cost ratio for this equipment purchase? b. Based on the Benefit/Cost analysis should Metro Atlanta purchase the equipment?
Solve this problem using the incremental Benefit - Cost ration with, expected life of 10 years and rate of return of 10% Alternative A Initial cost Annual maintenance cost Estimated annual benefit $50,000 $4,000 $10,000 Alternative B Initial cost $30,000 Annual maintenance cost $3,000 Estimated annual benefit $9,000 a. Select A with B/C =1.14 b. Select B with B/C 1.14 OC. Select B with B/C = 0.14 O d. Reject A with B/C = 1.14
6. An alternative has the following cash flows: P50,000 per year a. Benefit ... b. Disbenefit .. c. Initial Cost.. d. M&O Cost .... What is the B/C ratio if the alternative has an infinite life and the interest rate is 6% per year? .P 27,000 per year P 250,000 P 10,000 per year
A project being consider by a local government has the following estimated benefit – cost data - $1000 investment for the first 2 years and then recurring cost of $5000 for the coming 2 years and $8000 for year 5& 6 respectively. Also there are benefits of $20,000, $30,000, $ 30,000 and $20,000 starting from the third year. Consider the interest rate to be 10%, design an optimal solution to perform cost-benefit analysis and conclude if the project is suitable or not.
7.43 Five mutually exclusive, direct benefit alternatives are compared using the B/C method. The alternative to select is: a. J b. K c. L d. M Alternative J K LMN Total Investment, $ million 20 25 33 45 49 Overall B/C Ratio AB/C When Compared to Alternative JK L M N 1.02 1.18 1.20 1.12 1.42 0.98 0.89 0.72 0.80 0.08 0.94 0.84 0.89 0.76 1.32 -
3. CSUN receives a $15 million grant to train middle and high school science and math teachers. The ten-year grant will create an estimated savings of $1.5 million per year in teachers salaries and any student incurred expenses. To fund other ongoing events and activities, an estimated $200,000 per year will be removed from other program funding. Operating costs will be $500,000 per year for program success. Use the modified B/C method via AW with an ROR of 6% to identify whether this program is economically justifiable.
Q4. The cash flow details of a public project is as follows = BD 250000 Initial cost /investment Annual benefits/revenues = BD 120000 Worth of annual cost Salvage value Interest rate per year 8% and useful lie 30 Years Use the three project evaluation methods( PW, FW, AW) = BD 12,000 = BD 150000

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS