a river. The estimated cost and benefits are listed below. (i) If a 6% per year rate applies and dam life is infinite for analysis purpose, select the one best location using the B/C method. If no site is acceptable, other sites will be determined later. (ii) If more than one dam site can be selected, which sites are acceptable, using B/C method?

a river. The estimated cost and benefits are listed below. (i) If a 6% per year rate applies and dam life is infinite for analysis purpose, select the one best location using the B/C method. If no site is acceptable, other sites will be determined later. (ii) If more than one dam site can be selected, which sites are acceptable, using B/C method?

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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3. Using both Payback and NPV results, which projects, if any, would yourecommend McGloire should fund? Justify your answer and include a criticalassessment of two nonfinancial qualitative factors that could affect the investment
Project A and Project B are independent projects. Investment life of Project A is 4 years and investment life of Project B is 17 years. Project A's NPV is $375 and Project B's NPV is $1,743. EANPV of project A is $102 and EANPV of project B is $96. Which of the following decision is correct? O a. Select both projects because both have positive NPVs. O b. Select Project A because it has a shorter investment life O c. Select Project B because it has a longer investment life Od. Select Project A because it has a higher EANPV O e. Select Project B because it has a higher NPV
GoG is considering two alternative proposals to improve road safety and reduce traffic congestion in city “A”: (a) constructing a new bypass or (b) upgrading existing roadways. The Bypass Proposal will have an initial cost of GHC60 million and annual maintenance costs of GHC2.25 million. It is expected to yield benefits of GHC9.75 million per year. The Upgrading Proposal has an initial cost of GHC7 million, annual maintenance costs of GHC262,500 and annual social benefits of GHC1.14 million. Each project has a life of 30 years. The Bypass Proposal, which would have donor funding component, involves a discount rate of 8% while the Upgrading Proposal, to be funded wholly by government, has a discount rate of 4%. i. Calculatethenetpresentvalueofeachproposalanddetermineifit is economically viable ii. Which of the two proposals is more economically justifiable.
A new storm drainage system must be constructed right away to reduce periodic flooding that occurs in a city that is in a valley. Five mutually exclusive designs have been proposed, and their present worth (in thousands of dollars) of costs and benefits are the following. Solve, a. Which system has the greatest B–C ratio? b. Which system has the largest incremental B–C ratio(based on differences between alternatives)? c. Which system should be chosen ?
To calculate the initial project cash flow, this problem requires Using only the purchase price of the lot. Using today's market value for the land Using today's market value for the land plus the other costs O Using the purchase price of the lot plus the other costs
(a) A project management consultant estimated that if a particular project was completed, t years after completion, N thousand persons would benefit directly from the project, where N(t) = 4.5t2 + 16t, 0st< 10 For what value of t, will the largest number of people receive direct benefits?
identify the life cycle costs for a proposed wind farm.
A certain masonry dam requires 200,000 cu m of gravel for its construction. The contractor found two possible sources of gravel with the following data: Average distance gravel pit to dam site Gravel cost /cu.m at pit Purchase price of pit Road construction necessary Overbuden to be removed at P4.20 cu.m Hauling cost per cu.m per km CreWhich of the two sites will give lesser cost? Source A 3.0 km P800,000.00 P350,000.00 P5.00 Source B 1.2 km P10.00 80,000 cu.m P5.00 OF PERPET
The Cebu City plans to increase the capacity of her existing water transmission lines. Two plans are under consideration. Plan A requires the construction of a parallel pipeline, the flow being maintained by gravity. The initial cost is P197,342,811 and the life is 40 years, with an annual operating cost of P8,450,154 for the 1st 20 years and P13,297,046 for the next 20 years. Plan B requires the construction of a booster pumping station costing P100M with the life of 40 years. The pumping equipment cost an additional amount of P25M, it has a life of 20 years and a salvage value of P2M. The annual operating cost is P5M. Using the Present Value (PV) Method and an interest of 21% cpd. annually, what is the PV of Plan A?
If the flood damage estimates for both alternatives were reduced to zero and replaced with benefits of $310,000 per year and $470,000 per year for thetwo alternatives, respectively, the B/C ratio for the Valley alternative is closest to:a. 0.93b. 1.02c. 1.23d. 1.56
4) Two installations are being considered to provide for water storage in a chemical plant. A tank on a tower or a tank of equal capacity placed on a hill some distance from the plant. The cost of installing the tank and tower is estimated at P350,000. The cost of installing the tank on the hill, including the extra length of service lines, is estimated at P300,000. The hill installation will require an additional investment of P30,000 in pumping equipment whose life is estimated to be 15 years with a salvage value of P2,500. The life of the two installations is estimated to be 30 years. Annual cost of labor, electricity, and maintenance incident to the pumping equipment is estimated at P3,000. Taxes and insurance for both are 2.5% of the first cost. Money is worth 18% effective. Which alternative should be used? (USE PW and EUAC) ;
A consulting engineer is considering two methods for lining landfill for municipal solid waste management in Bannock County, Idaho. A geosynthetic bentonite clay liner (GCL) will cost $2.0 million to install, and if it is renovated after 4 years at a cost of $400,000, its life can be extended another 2 years. Alternatively, a high-density polyethylene (HDPE) geomembrane can be installed that will have a useful life of 12 years. At an interest rate of 6% per year, how much money can be spent on the HDPE liner for the two methods to break even?

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