Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 90 years, and the sponsoring agency'sMARR is 11% per year. Annual benefits to the public have been estimated by an advisory committee and are shown below. Use the B-C method (incrementally) toselect the best jogging track.AlternativeBInitial costS145,000$64,000$57,000$50,000Annual benefits$21,000$10,500$9,000$7,000B-C ratio1.321.491.441.27Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.)AlternativeInc. B-C ratioIs the alternative acceptable?D1.27Yes2.60Yes

Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 90 years, and the sponsoring agen MARR is 11% per year. Annual benefits to the public have been estimated by an advisory committee and are shown below. Use the B-C method (incremental select the best jogging track. Alternative C $57,000 D Initial cost $145,000 S64,000 $50,000 Annual benefits $21,000 $10,500 $9,000 $7,000 B-C ratio 1.32 1.49 1.44 1.27 Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.) Alternative Inc. B-C ratio Is the alternative acceptable? 1.27 Yes

Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 90 years, and the sponsoring agen MARR is 11% per year. Annual benefits to the public have been estimated by an advisory committee and are shown below. Use the B-C method (incremental select the best jogging track. Alternative C $57,000 D Initial cost $145,000 S64,000 $50,000 Annual benefits $21,000 $10,500 $9,000 $7,000 B-C ratio 1.32 1.49 1.44 1.27 Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.) Alternative Inc. B-C ratio Is the alternative acceptable? 1.27 Yes

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A project being consider by a local government has the following estimated benefit – cost data - $1000 investment for the first 2 years and then recurring cost of $5000 for the coming 2 years and $8000 for year 5& 6 respectively. Also there are benefits of $20,000, $30,000, $ 30,000 and $20,000 starting from the third year. Consider the interest rate to be 10%, design an optimal solution to perform cost-benefit analysis and conclude if the project is suitable or not.
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7.43 Five mutually exclusive, direct benefit alternatives are compared using the B/C method. The alternative to select is: a. J b. K c. L d. M Alternative J K LMN Total Investment, $ million 20 25 33 45 49 Overall B/C Ratio AB/C When Compared to Alternative JK L M N 1.02 1.18 1.20 1.12 1.42 0.98 0.89 0.72 0.80 0.08 0.94 0.84 0.89 0.76 1.32 -
A proposal to reduce traffic congestion on Jounieh Highway has a B/C ratio of 1.4. The annual worth of benefits minus disbenefits is $560,000. What is the first cost of the project if the interest rate is 5% per year and the project is expected to be perpetual?* 4,000,000 4,588,208 8,000,000 6,666,667
USAA is considering adding a new runway and has 3 options for the runway surface: asphalt, concrete, and a mixture of both. The benefit from all 3 alternatives is the same. Therefore, these projects are cost-based alternatives, and the cash flows are provided in the table below. Using conventional benefit/cost ratio with MARR of 9%, which alternative should be selected? First cost AW of resurfacing cost Asphalt Concrete Mixture $250,000,000 $350,000,000 $400,000,000 $30,000,000 $20,000,000 $10,000,000 Disbenefits at construction time $5,000,000 Life, years Asphalt is better Concrete is better The Mixture is better 20 $10,000,000 20 $12,000,000 20
Given a single alternative for a proposed government project, if the alternative's benefit-cost ratio is 1.4, then the project O Should be accepted. Should not be accepted. Should be reevaluated to increase its ratio. Is not good enough for a government project. Show Transcribed Text Public investment projects should provide benefits for the public's greater good that exceed the payback period present worth annual worth costs of providing those benefits.