In the development of a publicly owned, commercial waterfront area, three possible independent plans are being considered. Their costs and estimated benefits are given in the table to the right. a. Which plan(s) should be adopted, if any, if the controlling board wishes to invest any amount required, provided that the B-C ratio on the required investment is at least 1.0? b. Suppose that 5% of the costs of each plan are reclassified as disbenefits. What percentage change in the B-C ratio of each plan results from the reclassification? c. Comment on why the rank-orderings in (a) are unaffected by the change in (b). Plan A B с PW ($000s) Costs $125,000 Benefits $139,000 152,000 107,000 137,000 104,000

1.  Giving effect to straight-line depreciation on the investments and assuming no estimated residual value, compute the average rate of return for each of the four proposals. If required, round your answers to one decimal place. Proposal Average Rate of Return Proposal A % Proposal B % Proposal C % Proposal D % 2.  Using the following format, summarize the results of your computations in parts (1) and (2) by placing the calculated amounts in the first two columns on the left and indicate which proposals should be accepted for further analysis and which should be rejected. If required, round your answers to one decimal place. Proposal Cash Payback Period Average Rate of Return   A   %   B    %   C   %   D   %   3.  For the proposals accepted for further analysis in part (3), compute the net present value. Use a rate of 15% and the present value of $1 table above. Round to the nearest dollar. Line Item Description Answer Answer Select the…

3) Which of the following statements correctly relates to project appraisal? A) Changes in working capital as a result of implementing a project should be included in the project appraisal. B) The costs of surveys and feasibility studies incurred prior to the decision to implement a project should be included in the project appraisal, as they are a cost of the project. C) The effect of a new project on other parts of a business is irrelevant when trying to decide whether to go ahead with the new project. D) Depreciation is a legitimate cost of a project and should be included in a project appraisal.

three In the development of a publicly owned, commercial waterfront area, possible independent plans are being considered. Their costs and estimated benefits are given in the table to the right. a. Which plan(s) should be adopted, if any, if the controlling board wishes to invest any amount required, provided that the B-C ratio on the required investment is at least 1.0? b. Suppose that 15% of the costs of each plan are reclassified as disbenefits. What percentage change in the B-C ratio of each plan results from the reclassification? c. Comment on why the rank-orderings in (a) are unaffected by the change in (b). Plan ABC PW ($000s) Costs Benefits $97,000 $149,000 119,000 105,000 130,000 136,000