8.12 US Airport Authority (USAA) is entertaining three independent proposals presented in the table below for Gator Regional Airport. USAA uses a MARR of 12 percent and has no budget constraint. Using B/C ratio and PW values, which of the following projects are economically justified and should be undertaken by USAA to maximize the services to the public? New Parking Garage (NPG) Flight Information Screen (FIS) Gate Expansion (GE) (in millions) First cost (P) $120 $3 $50 Annual operating cost (АОC) $5 $0.5 $3 Annual benefits (B) $25 $1.0 $6 Disbenefits at the time $5 $0 $2 zero (D) Salvage value (S) Life, years $15 $0.4 $5 20 5 25

8.12 US Airport Authority (USAA) is entertaining three independent proposals presented in the table below for Gator Regional Airport. USAA uses a MARR of 12 percent and has no budget constraint. Using B/C ratio and PW values, which of the following projects are economically justified and should be undertaken by USAA to maximize the services to the public? New Parking Garage (NPG) Flight Information Screen (FIS) Gate Expansion (GE) (in millions) First cost (P) $120 $3 $50 Annual operating cost (АОC) $5 $0.5 $3 Annual benefits (B) $25 $1.0 $6 Disbenefits at the time $5 $0 $2 zero (D) Salvage value (S) Life, years $15 $0.4 $5 20 5 25

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

8.12 US Airport Authority (USAA) is entertaining three independent proposals presented
in the table below for Gator Regional Airport. USAA uses a MARR of 12 percent and
has no budget constraint. Using B/C ratio and PW values, which of the following
projects are economically justified and should be undertaken by USAA to maximize the
services to the public?
New Parking Garage
(NPG)
Flight Information
Screen (FIS)
Gate Expansion
(GE)
(in millions)
First cost (P)
$120
$3
$50
Annual operating cost
(AOC)
Annual benefits (B)
$5
$0.5
$3
$25
$1.0
$6
Disbenefits at the time
$5
$0
$2
zero (D)
Salvage value (S)
Life, years
$15
$0.4
$5
20
25

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