A state-sponsored Forest Management Bureau is evaluating alternative routes for a new road into a formerly inaccessible region. Three mutually exclusive plans for routing the road provide different benefits, as indicated in table below. The roads are assumed to have an economic life of 45 years, and MARR is 6% per year. Which route should be selected according to the B-C ratio method? Assume that a roadway must be constructed. Cost $5,000 Route Construction Annual Maintenance Annual Savings in Annual Recreational Costs Fire Damage Benefit Annual Timber Access Benefit A $285,000 $5,500 $3,000 B C 215,000 180,000 6,500 3,000 1,300 700 3,300 1,900 $12,000 6,500 4,000 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 6% per year. Perform the incremental B-C Analysis. Fill-in the table below. (Round to four decimal places.) Alternative A Inc. B-C ratio 1.5253 Is the alternative acceptable?

A state-sponsored Forest Management Bureau is evaluating alternative routes for a new road into a formerly inaccessible region. Three mutually exclusive plans for routing the road provide different benefits, as indicated in table below. The roads are assumed to have an economic life of 45 years, and MARR is 6% per year. Which route should be selected according to the B-C ratio method? Assume that a roadway must be constructed. Cost $5,000 Route Construction Annual Maintenance Annual Savings in Annual Recreational Costs Fire Damage Benefit Annual Timber Access Benefit A $285,000 $5,500 $3,000 B C 215,000 180,000 6,500 3,000 1,300 700 3,300 1,900 $12,000 6,500 4,000 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 6% per year. Perform the incremental B-C Analysis. Fill-in the table below. (Round to four decimal places.) Alternative A Inc. B-C ratio 1.5253 Is the alternative acceptable?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

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