From the following data, use the conventional B/C ratio for a project that has a 20-year life to determine if it is economically justified. Use an interest rate of 8% per year. Consequences To the People Annual benefits $135,000 per year Annual disbenefits - $10,000 per year The B/C ratio is The project is [(Click to select) To the Government First cost-$700,000 Annuel cost $141,000 per year Annual savings $30,000 per year

From the following data, use the conventional B/C ratio for a project that has a 20-year life to determine if it is economically justified. Use an interest rate of 8% per year. Consequences To the People Annual benefits $135,000 per year Annual disbenefits - $10,000 per year The B/C ratio is The project is [(Click to select) To the Government First cost-$700,000 Annuel cost $141,000 per year Annual savings $30,000 per year

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Consider a piece of equipment that has the following cost and benefit estimates, and the interest…

A: Additional Considerations:Although the B/C ratio is a useful tool, it's crucial to take other…

Q: U.S. route 83 passes through the village of Burr Ridge, IL. The engineers of the Transportation…

A: A future cash flow or series of future cash flows are valued today based on their present value…

Q: QUESTION NO.13 Two relatively inexpensive alternatives are available to reduce potential earthquake…

A: Given: Interest rate=8% Study period=20 years

Q: The estimated present cost to start a proposed municipal government project is $5,500,000. The…

A: a) Modified B/C ratioThe modified B/C ratio is a measure of the economic justification of a project.…

Q: The B/C ratio is The project is economically not justified

A: B/C (benefit-cost) ratio is the relationship between the costs and benefits of a particular project.…

Q: From the following data, use the conventional B/C ratio for a project that has a 20-year life to…

A: Present Value of Benefits: PVb=(115,000−10,000)×(1−(1+0.08)^−20)/0.08PVb=105,000×9.818149…

Q: The following data is provided for a PPP project. To the People To the Government Benefits…

A: The benefit-cost ratio (BCR) is an indicator showing the relationship between the relative costs and…

Q: Required information The following data is provided for a PPP project. To the People Benefits…

A: The benefit-cost ratio (BCR) is an indicator showing the relationship between the relative costs and…

Q: part from its economic strategies, Coca Cola Amatil has identified three main CSR objectives:…

A: Social Corporate Responsibility: Corporate Social Responsibility is an administration idea by which…

Q: Concept VP of benefits, $ VA of no benefits, $ Initial cost, $ Operation cost and mantenaince by…

A: The cost-benefit ratio provides the cost analyses for decision marking. It states whether an…

Q: Required information The following data is provided for a PPP project. To the People To the…

A: The expression conventional B/C ratio likely implies the Benefit-Cost Ratio (B/C ratio) in the…

Q: What is the Benefit/cost ratio of a project if the PW benefits is equal to $100,000 and the PW costs…

A: Benefit-cost ratio:- In a cost-benefit analysis, a benefit-cost ratio is used to summarize the…

Q: Two relatively inexpensive alternatives are available for reducing potential earthquake damage at a…

A: The benefit-cost ratio is computed by dividing the present value of the projected benefit by the…

Q: The benefits associated with a nuclear power plant cooling water filtration project located on the…

A: The benefit-cost ratio (B/C ratio) is used to assess the desirability of an investment or project by…

Q: A consultant, after 3 months of work, reported that the modified B/C ratio for a city-owned hospital…

A: Let annual M&O cost be M. Then Modified B/C ratio = (PW of annual benefit - PW of annual M&O…

Q: The modified B/C ratio for a city-owned hospital heliport project is 1.7. The initial cost is $0.6…

A: (Q) The modified B/C ratio for a city-owned hospital heliport project is 1.7. The initial cost is…

Q: In a modified B/C ratio: Select one: a. M&O costs are put in the denominator. b. Dis-benefits are…

A: The benefit-cost ratio is the ratio of the present value of the benefit to the present value of…

Q: BENEFIT COST ANALYSIS ASSIGNMENT Calculate the B/C ratio for the following cash flow using…

A: The conventional B/C ratio is calculated as B/C ratio =PW of benefitsPW of cost In a conventional…

Q: One of two alternatives will be selected to reduce flood damage in a rural community in central…

A: Given the discount rate = 7% Time period = 20 years

Q: Site license or 50 desktop licenses? Option A is to pay $12,000 for a 3-year site license usable by…

A: The equivalent uniform annual cost (EUAC) is the cost that is incurred at the time of gaining…

Q: A county will invest $4,200,000 to clean up a chemical spill that occurred following a natural…

A: Benefit/Cost Ratio. Measure determined by dividing the incremental monetized benefits connected with…

Q: The following data is provided for a PPP project. To the People Benefits Disbenefits $140,000 per…

A: The Conventional Benefit-Cost Ratio (B-C ratio) is a financial metric used in project evaluation to…

Question

From the following data, use the conventional B/C ratio for a project that has a 20-year life to determine if it is economically justified.
Use an interest rate of 8% per year.
Consequences
To the People
Annual benefits = $135,000 per year
Annual disbenefits = $10,000 per year
The B/C ratio is
The project is [[(Click to select)
To the Government
First cost = $700,000
Annual cost
Annual savings
$141,000 per year
$30,000 per year
E
=

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Define benefit cost ratio

VIEW

Step 2: Calculate the B/C ratio

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

The benefits associated with a nuclear power plant cooling water filtration project located on the Ohio River are $12,000 per year forever, starting in year 1. The costs are $25,000 in year O and $25,000 at the end of year 2. At /= 10% per year, calculate the B/C ratio to determine if the project is justified economically. The B/C ratio will be [ The project is economically [justifed
The B/C ratio for a mosquito control program proposed by the Harris County Department of Health is reported to be 2.1. The person who prepared the report stated that the annual health benefits were estimated to be $400,000, and that disbenefits of $25,000 per year were used in the calculation. He also stated that the costs for chemicals, machinery, maintenance, and labor were estimated at $150,000 per year, but he forgot to list the cost for initiating the program (trucks, pumps, tanks, etc.). If the initial cost was amortized over a 10-year period at 8% per year, what is the estimated initial cost?
It asks for modified B/C ratio.
Locations under consideration for a border patrol station have their costs estimated by the federal government. Use the B/C ratio method at an Interest rate of 9.00% per year to determine which location to select, if any. (Round the final answer to three decimal places.) Location Initial Cost, $ Annual Cost, $ per Year Disbenefits, $ per Year Life, Years The AB/C ratio is -928888.889 ✪ Select location. N North N 1,360,000 480,000 70,000 South S 2,900,000 400,000 45,000 0
The following data is provided for a PPP project. To the People To the Government Benefits $145,000 per year beginning now Cost $1.8 million now and $200,000 every 3 years Disbenefits $25,000 per year Savings $105,000 per year Calculate the conventional benefit/cost ratios using an interest rate of 9% per year and an infinite project period.
I submitted the following question already once and recieved a response from an expert that it was incomplete. This is not true as it is straight out of the book. Please review the question again. Question: Use the B/C method to compare four mutually exclusive alternatives for recycling plastic bottles. Make any additional calculations necessary to determine which alternative should be selected.
5,6,7 search Saved Help S GE
A shopping center is to be built in one of four different cities. The cash flow estimates associated with each alternative are given below. You will be using the conventional B/C ratio method to determine which city should be selected at an interest rate of 15% per year. One alternative must be selected. The following table shows the details of each alternative. Alternative Benefits, s/year Disbenefits, $/year ERR City1 95 12 8 170 City2 Life, years First cost, $ M&O costs, $/year Please find the following - B/C of City1 ✓ Incremental B/C of City1 vs. City3 30 110 55 12 210 30 City3 90 12 8 160 30 City4 105 15 10 180 25 Based on the incremental B/C analysis applied to all four cities, choose one city among the four cities. A. 1.22 B. City3 C. 0.00 D. City2 E. 2.50 F. 1.00 G.1.19 H.City4 1. City1 J. 2.24 K. 1.48
You have been requested to compare four mutually exclusive alternatives using the B/C method and the results are shown. Which alternative, if any, do you recommend? Alternative X Z Q Equivalent Total Cost, $ Million 20 30 50 90 Direct B/C Ratio 0.75 1.07 1.20 1.11 AB/C Ratio When Compared with Alternative 1.70 1.50 1.21 1.40 1.13 Z 1.00
The federal government is considering three sites in the National Wildlife Preserve for mineral extraction. The cash flows (in millions) associated with each site are given below. Use the B/C method to determine which site, if any, is best, if the extraction period is limited to 5 years and the interest rate is 10% per year. Site A Initial cost, $ Annual cost, $/year Annual benefits, $/year Annual disbenefits, $/year 50 3 20 0.5 Site B 90 4 29 1.5 Site C 200 6 61 2.1
Calculate the conventional B/C ratio for the following cash flow estimates at a discount rate of 10% per year. Is the project justified? Item Estimate PW of Benefits, $ AW of Disbenefits, $/year PW Cost, $ Life, Years 4,150,000 45,000 1,325,000 20
A consultant, after 3 months of work, reported that the modified B/C ratio for a city-owned hospital heliport project is 2. If the initial cost is $2.1 million and the annual benefits are $165,000, what is the amount of the annual M&O costs used in the calculation? The report stated that a discount rate of 5% per year and an estimated life of 40 years were used. The M&O cost is $