(b) A local government has funded a public project with the following data. Initial investments Annual benefits Annual operating and maintenance (O&M) costs Salvage value Project life Interest rate $5,000,000 $1,500,000 S300,000 $500,000 8 years 6% (i) Determine whether the project is a good investment by using conventional B-C (Benefit-Cost) ratio based on AW (Annual Worth) method. (ii) Determine whether the project is a good investment by using modified B-C (Benefit- Cost) ratio based on PW (Present Worth) method.

(b) A local government has funded a public project with the following data. Initial investments Annual benefits Annual operating and maintenance (O&M) costs Salvage value Project life Interest rate $5,000,000 $1,500,000 S300,000 $500,000 8 years 6% (i) Determine whether the project is a good investment by using conventional B-C (Benefit-Cost) ratio based on AW (Annual Worth) method. (ii) Determine whether the project is a good investment by using modified B-C (Benefit- Cost) ratio based on PW (Present Worth) method.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

What is the intervention process for a distressed project? (a) Requirements gathering and work breakdown structure construction(b) Conduct the earned value analysis (c) Conduct the earned value analysis and root cause analysis (d) None of the above
ΔRoR for the first increment (Alt. C-Alt. A) is ___________________. Alt. A Alt. B Alt. C Initial cost $5,000 9,000 7,500 Annual benefits $1,457 2,518 2,133 RoR 14% 12.4% 13% Life in years 5 Group of answer choices 10.12% 11.00 11.85% 9.38%
3 (20 pts) An engineer is considering the projects below, all of which can be last indefinitely. If the company's MARR is 14% per year, determine which two options should be selected using B/C ratio analysis First Cost 10000 Annual Income Total benefit/yr Total Cost/yr 1500 B/C ratio B C 5000 1000 7500 1400 35000 25000 D 5250 3000 Incremental B/C Analysis ORDER:
A certain masonry dam requires 200,000 m³ of gravel for its construction. The contractor found two possible sources for the gravel with the following data: Source A Source B Average distance, gravel pit to dam site 3 km 1.2 km Gravel cost/m³ at pit ➖➖➖➖➖ P10 Purchase price of pit P800,000 Road construction necessary P450,000 Overburden to be removed at P4.20/m³ 90,000m³ ➖➖➖➖➖➖ Hauling cost/m³/km P4 P4 What is the Total Cost of Source A
Please handwriten solution
A business owner is comparing between three alternatives (A, B, and C) for their new project. A. Buy a new equipment with an initial cost of $120,000; annual operating cost of $7000; and salvage value of $5000. B. Buy a new equipment with an initial cost of $105,000; annual operating cost of $10500; and salvage value of $7000. C. Continue using the same equipment they already have with an annual operating cost of $25,000. Life of all alternatives is 12 years. With interest at 8% compounded annually, which alternative should the engineer recommend? Use future worth analysis.
Which statement is not true with respect to estimating the economic impacts of proposed engineering projects? (a) Order-of-magnitude estimates are used for high-level planning. (b) Order-of-magnitude estimates are the most accurate type at about –3 to 5%. (c) Increasing the accuracy of estimates requires added time and resources. (d) Estimators tend to underestimate the magnitude of costs and to overestimate benefits.
You invested $100,000 in a project and received $40,000 at n = 1, $40,000 atn = 2, and $30,000 at n = 3 years. You need to terminate the project at the end of year 3. Your interest rate is 10%; what is the project balance at the time of termination?(a) Gain of $10,000(b) Loss of $8,039(c) Loss of $10,700(d) Just break even
A seasonal bus tour firm has 5 buses with a capacity of 60 people each. Each customer pays $25 for a one-day tour. Records show $360,000 in fixed costs per season, incremental costs of $5 per customer, and an average daily occupancy of 80%. The number of days of operation necessary each season to break even is closest to which value? (a) 50 days (b) 75 days (c) 100 days (d) 120 days?
Give typing answer with explanation and conclusion
List the five main types of engineering economic decisions?
Answer manually please . I need step by step huhuhu. Thank you a) Using Repeatability: AWA=$______ and AWB=$________ (annual worth) b) Using Co-terminated: AWA=$_________and AWB=________ (annual worth) c) Capitalized Cost: CCA=$_______ and CCB=$__________