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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Question

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, $/year
ERR
City1
95
12
8
170
City2
Life, years
First cost, $
M&O costs, $/year
Please find the following
- B/C of City1
✓ Incremental B/C of City1 vs. City3
30
110
55
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
1. City1
J. 2.24
K. 1.48

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