A city government is considering two types of town-dump sanitary systems. Design A requires an initial outlay of $354,000 with annual operating and maintenance costs of $45,000 for the next 16 years; design B calls for an investment of $277,000 with annual operating and maintenance costs of $67,000 peryear for the next 16 years. Fee collections from the residents would again be $90,000 per year. The interest rate is 11%, and no salvage value is associated with either system.Click the icon to view the interest factors for discrete compounding when /= 11% per year.(a) Using the benefit-cost ratio BC(), which system should be selected?The PIA - B is 2.11. (Round to two decimal places.)Which system should be selected? Choose the correct answer below.ODesign BDesign AI(b) If a new design (design C), which requires an initial outlay of $335,500 and annual operating and maintenance costs of $56,000, is proposed, would your answer in part (a) change?The PIA -c is 4.39. (Round to two decimal places.)The PIC-a is- (Round to two decimal places.)More InfoN11121314151617181920Single PaymentCompoundAmountFactor(F/P, I, N)3.15183.49853.88334.31044.78465.31095.89516.54367.26338.0623PresentWorthFactor(P/F, I, N)0.31730.28580.25750.23200.20900.18830.16960.15280.13770.1240PrintCompoundAmountFactor(F/A, I, N)19.561422.713226.211630.094934.405439.189944.500850.395956.939564.2028DoneEqual Payment SeriesSinking PresentFundWorthFactor Factor(A/F, I, N) (P/A, I, N)6.20650.05110.04406.49240.03826.74990.03320.02916.98197.19090.02550.02250.01980.01760.0156- X7.37927.54887.70167.83937.9633

The benefit-cost ratio (BCR), also known as the cost-benefit ratio (CBR), is a financial metric used…

A city government is considering two types of town-dump sanitary systems. Design A requires an initial outlay of $354,000 with annual operating and maintenance costs of $45,000 for the next 16 years: design B calls for an investment of $277,000 with annual operating and maintenance co year for the next 16 years. Fee collections from the residents would again be $90,000 per year. The interest rate is 11%, and no salvage value is associated with either system. Click the icon to view the interest factors t discrete compounding when i 11% per year.

A city government is considering two types of town-dump sanitary systems. Design A requires an initial outlay of $354,000 with annual operating and maintenance costs of $45,000 for the next 16 years: design B calls for an investment of $277,000 with annual operating and maintenance co year for the next 16 years. Fee collections from the residents would again be $90,000 per year. The interest rate is 11%, and no salvage value is associated with either system. Click the icon to view the interest factors t discrete compounding when i 11% per year.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Two investment projects are being evaluated based on their payback periods. The first alternative requires an initial investment of $520,000, has gross revenues of $85,000, annual O&M costs of $17,000 and a service life of 23 years. What is the project's discounted payback period if the MARR is 10% per year? OA. 8.8 years OB. 19.1 years OC. 15.2 years OD. 9.9 years If the second alternative has a payback period of 20 years, which alternative should be preferred based on the payback period? OA. The second alternative OB. The first alternative
An electric utility is taking bids for the purchase, installation, and operation of decentralized battery storage systems. The table below has some details for the two bids received. a) Which is the most economical bid if the rate is 11%. None of the batteries are expected to have a salvage value after 30 years of use. (Actual expected service life is listed in the bid) b) Also solve using NPW method to compare these two mutually exclusive plans Equipment cost Installation cost Annual Inspection and Maintenance fee Annual extra income taxes Life Salvage Value Bid A $112,000 $25,000 $2,000 0 40 years 0 Bid B $98,000 $30,000 $2,000 $800 35 years 0
Based on PW values, determine which of the following independent projects should be selected for investment if $240,000 is available and the MARR is 10% per year. (NCF = net cash flow) Project Initial Investment, $ NCF, $/Year Life, Years A −100,000 50,000 8 B −125,000 24,000 8 C −120,000 75,000 8 D −220,000 39,000 8 E −200,000 82,000 8
Could you help me with this question, I would greatly apprecite it. Thank you!
Five mutually exclusive alternatives are being considered for providing a sewage- treatment facility. The annual equivalent costs and estimated benefits of the alternatives are as follows: Alternative E Annual Equivalent (in thousands) Cost $1,050 Benefits $1,110 900 $1,810 1,230 $1,390 1,350 $1,500 990 $1,140 Which plan, if any, should be adopted if the Sewage Authority wishes to invest if, and only if, the B-C ratio is at least 1.0.?
The Civil Engineering department at RRCP plans to purchase a 3D printer for the CARSI lab. One option is the purchase of a brand new machine (purchase price $1900), and will have a salvage value of $700 after three years. A second option is the purchase of a refurbished machine (purchase price $1200), which will cost $250 per year to maintain, with a salvage value of $250 after three years. What is the interest rate that will make these two options equivalent with respect to Present Worth?
A relocation of a short stretch of rural highway feeding into Route 390 northwest of Dallas is to be made to accommodate new growth. The existing road is now unsafe, and improving it is not an alternative. Alternate new route locations are designated as East and West. The initial investment by government highway agencies will be $4,000,000 for East and $5,125,000 for West. Annual highway maintenance costs will be $120,000 for East and $90,000 for the shorter location West. Relevant annual road user costs, considering vehicle operation, time en route, fuel, safety, mileage, and so on, are estimated as $880,000 for East and only $730,000 for West. Assume a 20-year service life and i-7% Part a What is the present worth of the benefits and costs of route West over route East? PW benefits of route West over route East: $ PW costs of route West over route East: $