A government-funded renewable energy electric power generation company has developed the following estimates (in $1000) for a new wind turbine farm. The MARR is 10% per year and the project life is 25 years. Calculate: (a) conventional B/C ratio, (b) modified B/C ratio. Benefits: $60,000 in year 0, $30,000 in year 5, Government savings: $2,000 in years 1 through 20, Cost. $40,000 in year 0, Disbenefits: $3000 in years 1 through 10.
A government-funded renewable energy electric power generation company has developed the following estimates (in $1000) for a new wind turbine farm. The MARR is 10% per year and the project life is 25 years. Calculate: (a) conventional B/C ratio, (b) modified B/C ratio. Benefits: $60,000 in year 0, $30,000 in year 5, Government savings: $2,000 in years 1 through 20, Cost. $40,000 in year 0, Disbenefits: $3000 in years 1 through 10.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A government-funded renewable energy electric power generation company has developed the following estimates (in $1000) for a new wind turbine farm. The MARR IS
10% per year and the project life is 25 years. Calculate:
(a) conventional B/C ratio,
(b) modified B/C ratio. Benefits. $60,000 in year 0, $30,000 in year 5, Government savings $2,000 in years 1 through 20, Cost. $40,000 in year 0, Disbenefits: $3000 in
years 1 through 10.
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