Consider the following cost proposals for the design and construction of a public art display. A B FC 1,200,000 1,800,000 AOC 75,000 100,000 Overhaul Cost in Year 10 900,000 125,000 If the discount rate of 7% is used and the useful life is 10 years before refurbishment, what is B/C ratio of the "delta" project and which option should be chosen? Consider the reduced overhaul cost of B in Year 10 as a "benefit" to the public. Group of answer choices A.0.761 and A B.0.508 and A C. 1.21 and B D. 1.09 and B
Consider the following cost proposals for the design and construction of a public art display. A B FC 1,200,000 1,800,000 AOC 75,000 100,000 Overhaul Cost in Year 10 900,000 125,000 If the discount rate of 7% is used and the useful life is 10 years before refurbishment, what is B/C ratio of the "delta" project and which option should be chosen? Consider the reduced overhaul cost of B in Year 10 as a "benefit" to the public. Group of answer choices A.0.761 and A B.0.508 and A C. 1.21 and B D. 1.09 and B
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Consider the following cost proposals for the design and construction of a public art display.
A | B | |
FC | 1,200,000 | 1,800,000 |
AOC | 75,000 | 100,000 |
Overhaul Cost in Year 10 | 900,000 | 125,000 |
If the discount rate of 7% is used and the useful life is 10 years before refurbishment, what is B/C ratio of the "delta" project and which option should be chosen? Consider the reduced overhaul cost of B in Year 10 as a "benefit" to the public.
Group of answer choices
A.0.761 and A
B.0.508 and A
C. 1.21 and B
D. 1.09 and B
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