A shopping center is to be built in one of four different cities. The cash flow estimates associated with each alternative are given below. You will be using the conventional B/C ratio method to determine which cityshould be selected at an interest rate of 15% per year. One alternative must be selected. The following table shows the details of each alternative.AlternativeBenefits, s/yearDisbenefits, $/yearERRCity195128170City2Life, yearsFirst cost, $M&O costs, $/yearPlease find the following- B/C of City1✓ Incremental B/C of City1 vs. City330110551221030City39012816030City4105151018025Based on the incremental B/C analysis applied to all four cities, choose one city among the fourcities.A. 1.22B. City3C. 0.00D. City2E. 2.50F. 1.00G.1.19H.City41. City1J. 2.24K. 1.48

The conventional B/C ratio is calculated as B/C ratio=AW of benefit -AW of disbenefitsAW of total…

A shopping center is to be built in one of four different cities. The cash flow estimates associated with each alternative are given below. You will be using the conventional B/C ratio method to determine which city should be selected at an interest rate of 15% per year. One alternative must be selected. The following table shows the details of each alternative. Alternative Benefits, s/year Disbenefits, s/year City1 95 12 8 City2 170 30 110 55 Life, years First cost, $ M&O costs, s/year Please find the following B/C of City1 Incremental B/C of Cityl vs. City3 12 210 30 City3 90 12 8 160 30 City4 105 15 10 180 25 Based on the incremental B/C analysis applied to all four cities, choose one city among the four cities. A 1.22 B. City3 C. 0.00 D. City2 E. 2.50 F. 1.00 G.1.19 H.City4

A shopping center is to be built in one of four different cities. The cash flow estimates associated with each alternative are given below. You will be using the conventional B/C ratio method to determine which city should be selected at an interest rate of 15% per year. One alternative must be selected. The following table shows the details of each alternative. Alternative Benefits, s/year Disbenefits, s/year City1 95 12 8 City2 170 30 110 55 Life, years First cost, $ M&O costs, s/year Please find the following B/C of City1 Incremental B/C of Cityl vs. City3 12 210 30 City3 90 12 8 160 30 City4 105 15 10 180 25 Based on the incremental B/C analysis applied to all four cities, choose one city among the four cities. A 1.22 B. City3 C. 0.00 D. City2 E. 2.50 F. 1.00 G.1.19 H.City4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Davao International Airport has crafted estimates for the upgradıng of security systems. Will the upgrade be accepted? Determine the B/C ratio at an interest rate of 10% per year using the conventional Annual Worth method of the following: a. Benefits are reduced by disbenefits b. Costs are increased by disbenefits Cashflow Amount First costs $13,000,000 $3,800,000 $6,750,000 $400,000 Annual worth of benefits Future Worth of disbenefits Annual operating and Maintenance costs Life 20 years
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1. Four independent public sector projects A, B, C and D were evaluated using the B/C ratio. The results were 0.85, 1,24, 0.75 and 0.55, respectively. Which among these projects should you recommend and why? State your assumptions. Explain your answer exhaustively.
The estimated annual cash flows for a proposed municipal government project are costs of $750,000 per year, benefits of $950,000 per year, and disbenefits of $200,000 per year. Calculate the conventional B/C ratio at an interest rate of 10% per year, and determine if it is economically justified. The B/C ratio is The project is economically justified
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1)what is the best project based on simple payback 2) What is the best project based on discounted payback 3)What is beta B/C ratio 4) What is gammas B/C ratio
The Texas Department of Transportation is considering in improving accident prevention countermeasures on the state's accident-prone public highways and bridges. The following set of projects has been recommended for evaluation at three different locations and assumes the budget is $20 million. All alternatives are mutually independent projects. Determine the best combination of projects within the budget constraint.(a) II-Band III-B only(b) I-A, II-A, and III-B(c) 1-B, III-A, and III-B(d) 11-B and IIl-B
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