One of two alternatives will be selected to reduce flood damage in a rural community in central Arizona. The estimates associated with each alternative are available. Use B/C analysis at a discount rate of 7% per year over a 20-year study period to determine which alternative should be selected. For analysis purposes only, assume that the benefits of reduced flood damage are available in years 3, 13, and 18 of the study period. Retention Pond Channel Initial Cost, $ 960,000 2,900,000 Annual Maintenance , $/Year 92,000 30,000 Reduced Flood Damage, $ 200,000 550.000 The AB/C ratio is The alternative that should be selected is the retention pond

One of two alternatives will be selected to reduce flood damage in a rural community in central Arizona. The estimates associated with each alternative are available. Use B/C analysis at a discount rate of 7% per year over a 20-year study period to determine which alternative should be selected. For analysis purposes only, assume that the benefits of reduced flood damage are available in years 3, 13, and 18 of the study period. Retention Pond Channel Initial Cost, $ 960,000 2,900,000 Annual Maintenance , $/Year 92,000 30,000 Reduced Flood Damage, $ 200,000 550.000 The AB/C ratio is The alternative that should be selected is the retention pond

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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