Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Question
Chapter 10, Problem 12P
To determine
Calculate the benefit cost ratio.
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When comparing different-life alternatives by the B/C method, the alternatives should be compared over: (a) The life of the shorter-lived alternative (b) The life of the longer-lived alternative (c) The LCM of their lives (d) An infinite time period
Six sites have been identified for a parking lot in downtown Blacksburg. Because the sites are plots of land, their salvage value and investment cost are identical. A 10-year study period has been specified, and the MARR is 19% per year. Which site should be chosen based on the IRR criterion?
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You have been requested to compare four mutually exclusive alternatives using the
B/C method and the results are shown. Which alternative, if any, do you
recommend?
Alternative
X
Z
Q
Equivalent
Total Cost,
$ Million
20
30
50
90
Direct
B/C Ratio
0.75
1.07
1.20
1.11
AB/C Ratio When Compared with Alternative
1.70
1.50
1.21
1.40
1.13
Z
1.00
Chapter 10 Solutions
Engineering Economy (17th Edition)
Ch. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - A retrofitted space-heating system is being...Ch. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10P
Ch. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Four mutually exclusive projects are being...Ch. 10 - Two municipal cell tower designs are being...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - You have been requested to recommend one of the...Ch. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26FECh. 10 - Prob. 27FECh. 10 - Prob. 28FECh. 10 - Prob. 29FECh. 10 - Prob. 30FECh. 10 - Prob. 31FE
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- The sheriff of Los Lunas county along the Arizona- Mexico border asked the county to build a new minimum security detention facility for personscaught while attempting to enter the United States illegally. The construction cost will be $22 million, with annual operating costs of $2.1 million. The new facility will create jobs that produce benefits for many local businesses including realtors, restaurants, etc. The benefits are estimated to be $5 million in years 1 and 2, $2.8 million in year 3, and $1.12 million per year beginning in year 4 and continuing through the 30-year life of the facility. At a discount rate of 8% per year, does the conventional B/C ratio indicate that the project is economically justified?arrow_forwardThe modified B/C ratio for a city-owned hospital heliport project is 1.7. The initial cost is $0.6 million, annual benefits are $150,000, and the estimated life is 29 years. What is the amount of the annual M&O costs used in the calculation at a discount rate of 6% per year? The annual M&O costs is $ .arrow_forwardTwo methods to control newly discovered poisonous weeds in bar-ditches on the sides of county roads in New Farmendale are under consideration. Method A involves use of a 20-year life lining at an initial cost of $14,000 and an annual maintenance cost of $3 per kilometer (km). Method B involves spraying a chemical that costs $40 per liter. One liter will treat 8 km, but the treatment must be applied four times per year. In determining the number of km per year that would result in breakeven, the variable cost for method B is closest to: (a) $5 per km (b) $15 per km (c) $20 per km (d) $40 per kmarrow_forward
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