5. Two alternatives are under consideration for providing energy at a remote research station, one of which must be selected: geothermal and solar. The benefits and costs associated with each alternative are shown. Use the B/C method to determine whic should be selected at an interest rate of 6% per year over a 20-year study period. Geothermal Solar

5. Two alternatives are under consideration for providing energy at a remote research station, one of which must be selected: geothermal and solar. The benefits and costs associated with each alternative are shown. Use the B/C method to determine whic should be selected at an interest rate of 6% per year over a 20-year study period. Geothermal Solar

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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
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Two investment projects are being evaluated based on their payback periods. The first alternative requires an initial investment of $340,000, has gross revenues of $61,000, annual O &M costs of $13,000 and a service life of 16 years. What is the project's discounted payback period if the MARR is 8% per year? A. 13.5 years B. 10.9 years C. 7.7 years O D. 6.6 years If the second alternative has a payback period of 6 years, which alternative should be preferred based on the payback period? O A. The second alternative B. The first alternative
The Texas Department of Transportation is considering in improving accident prevention countermeasures on the state's accident-prone public highways and bridges. The following set of projects has been recommended for evaluation at three different locations and assumes the budget is $20 million. All alternatives are mutually independent projects. Determine the best combination of projects within the budget constraint.(a) II-Band III-B only(b) I-A, II-A, and III-B(c) 1-B, III-A, and III-B(d) 11-B and IIl-B
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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 -
A proposal to reduce traffic congestion on Jounieh Highway has a B/C ratio of 1.4. The annual worth of benefits minus disbenefits is $560,000. What is the first cost of the project if the interest rate is 5% per year and the project is expected to be perpetual?* 4,000,000 4,588,208 8,000,000 6,666,667
The following estimates (in $1000 units) have been developed for a new cybersecurity system at Chicago's O'Hare Airport. Calculate the conventional B/C ratio at a discount rate of 10% per year. First cost, $ AW of benefits, $ per year FW (in year 20) of disbenefits, $ M&O costs, $ per year Expected life, years O 1.21 <1.15 1.52 O 1.91 DOCUMENT.pdf 13,000 3,800 6,750 400 20
WeChat Ltd is planned to build a new branch to serve the public. Only one alternative has been offered with the subsequent data shown in Table 1. With 12% interest rate and 10-year study period, using B/C ratio, determine the advantage cost to the public? Table 1: A cash flow profile Cost Initial cost Annual cost Salvage value Advantages year Disadvantages/ years Available alternative SAR700,000 SAR120,000 SAR300,000 SAR200,000 SAR20,000 SAR1,017,039.6 O SAR1,313,337,7 O SAR1,212,231.3 O SAR1,110,130.8 O O 0 O
USAA is considering adding a new runway and has 3 options for the runway surface: asphalt, concrete, and a mixture of both. The benefit from all 3 alternatives is the same. Therefore, these projects are cost-based alternatives, and the cash flows are provided in the table below. Using conventional benefit/cost ratio with MARR of 9%, which alternative should be selected? First cost AW of resurfacing cost Asphalt Concrete Mixture $250,000,000 $350,000,000 $400,000,000 $30,000,000 $20,000,000 $10,000,000 Disbenefits at construction time $5,000,000 Life, years Asphalt is better Concrete is better The Mixture is better 20 $10,000,000 20 $12,000,000 20