The estimated present cost to start a proposed municipal government project is $5,500,000. The annual operation cost of the project is $70,000. The estimated benefits from this project to the public are $470,000 per year, and the estimated existing disbenefits are $100,000 per year. The project has an estimated life of 20 years. a) Calculate the modified B/C ratio at an interest rate of 6% per year, and determine if it is economically justified. b) Calculatetheprofitabilityindexataninterestrateof6% peryear.

From the following data, use the conventional B/C ratio for a project that has a 20-year life to determine if it is economically justified. Use an interest rate of 8% per year. Consequences To the People Annual benefits = $135,000 per year Annual disbenefits = $10,000 per year The B/C ratio is The project is [[(Click to select) To the Government First cost = $700,000 Annual cost Annual savings $141,000 per year $30,000 per year E =

The B/C ratio for a flood control project along the Swanee River was calculated to be 1.1. If the benefits were $610,000 per year and the maintenance costs were $221,000 per year, determine the initial cost of the project at an interest rate of 11% per year and a 50- year life. The initial cost of the project is $

Problem 09.029 Two Alternative Comparison One of two alternatives will be selected to reduce flood damage in a rural community in central Arizona. The estimates associated with each alternative are available. Use B/C analysis at a discount rate of 8% per year over a 20-year study period to determine which alternative should be selected. For analysis purposes only, assume that the benefits of reduced flood damage are available in years 7, 13, and 18 of the study period. Retention Pond Channel Initial Cost, $ 920,000 2,400,000 Annual Maintenance, $/Year 92,000 30,000 Reduced Flood Damage, $ 200,000 775,000 The AB/C ratio is The alternative that should be selected is the [retention pond