Answered: A government-funded wind-based electric…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A government-funded wind-based electric power generation company in the southern part of the country has developed the following estimates (in $1000) for a new turbine farm. The MARR is 10% per year and the project life is 25 years.

Benefits: $45,000 in year 0; $30,000 in year 5

Government savings: $2,000 in years 1 through 20

Cost: $50,000 in year 0

Disbenefits: $3000 in years 1 through 10

What is the conventional B/C ratio

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Required information
A government-funded wind-based electric power generation company in the southern part of the country has developed
the following estimates (in $1000) for a new turbine farm. The MARR is 10% per year and the project life is 25 years.
Benefits: $45,000 in year 0; $30,000 in year 5
Government savings: $2,000 in years 1 through 20
Cost: $50,000 in year 0
Disbenefits: $3000 in years 1 through 10
NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part.
Calculate the conventional B/C ratio.
The conventional B/C ratio is

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