### Project Evaluation for a New Jogging TrackFour mutually exclusive projects are under consideration for the construction of a new 2-mile jogging track. The expected lifespan of the track is 90 years, with the sponsoring agency’s Minimum Attractive Rate of Return (MARR) set at 12% per year. The estimated annual benefits to the public are presented below, and the Benefit-Cost (B-C) method is used incrementally to determine the optimal jogging track option.#### Project Alternatives:| Alternative | Initial Cost | Annual Benefits | B-C Ratio ||-------------|--------------|-----------------|-----------|| A | $150,000 | $19,000 | 1.06 || B | $57,000 | $8,500 | 1.24 || C | $64,000 | $10,000 | 1.30 || D | $51,000 | $7,000 | 1.14 |#### Incremental Benefit-Cost (B-C) Analysis:Participants are asked to perform the incremental B-C analysis using the information provided. This analysis helps decide whether an alternative is financially justifiable.| Alternative | Incremental B-C Ratio | Is the Alternative Acceptable? ||-------------|----------------------|--------------------------------|| D | 1.14 | Yes |The analysis involves comparing the incremental B-C ratios to the MARR to determine if each alternative provides a sufficient return to warrant investment.

The Incremental Benefit-Cost Ratio (B/C Ratio), also known as the Incremental B/C Ratio, is a…

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's MARR is 12% per year. Annual benefits to the public have been estimated by an advisory committee and are shown below. Use the B-C method (incrementally) to select the best jogging track. A Initial cost $150,000 Annual benefits $19,000 B-C ratio 1.06 Alternative Alternative D B $57,000 $8,500 1.24 с $64,000 $10,000 1.30 D $51,000 $7,000 1.14 Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.) Inc. B-C ratio Is the alternative acceptable? 1.14 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 agency's MARR is 12% per year. Annual benefits to the public have been estimated by an advisory committee and are shown below. Use the B-C method (incrementally) to select the best jogging track. A Initial cost $150,000 Annual benefits $19,000 B-C ratio 1.06 Alternative Alternative D B $57,000 $8,500 1.24 с $64,000 $10,000 1.30 D $51,000 $7,000 1.14 Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.) Inc. B-C ratio Is the alternative acceptable? 1.14 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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The estimated annual cash flows for a proposed municipal government project are costs of $750,000 per year, benefits of $950,000 per year, and disbenefits of $200,000 per year. Calculate the conventional B/C ratio at an interest rate of 10% per year, and determine if it is economically justified. The B/C ratio is The project is economically justified
The modified B/C ratio includes maintenance and operation costs and treat them in a manner similar to benefits. Select one: True False
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Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 85 years, and the sponsoring agency's MARR is 9% per year. Annual benefits to the public have been estimated by an advisory committee and are shown below. Use the B-C method (incrementally) to select the best jogging track. Initial cost Annual benefits B-C ratio The best jogging track is alternative A $52,000 $7,500 1.60 Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.) Alternative A с B D B $62,000 $10,500 1.88 C… Alternative Inc. B-C ratio 1.60 C $57,000 $9,000 1.75 D $150,000 $19,000 1.41 Is the alternative acceptable? Yes Yes Yes Yes
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