Part a - Use present worth to choose the best project What is the PW of Project A (in millions of dollars rounded to two decimal points eg. x.xx)? What is the PW of Project B (in millions of dollars rounded to two decimal points eg. x.xx)? What is the PW of Project C (in millions of dollars rounded to two decimal points eg. x.xx)? Which Project is the best choice (Enter either 'A', 'B', or 'C')? Part b - Compute the benefit-cost ratios for the three projects. What is the BCR for project A (to three decimal points eg. x.xxx)? What is the BCR for project B (to three decimal points eg. x.xxx)? What is the BCR for project C (to three decimal points eg. x.xxx)?
The Newfoundland government is considering three new flood control projects for the Badger area. Projects A and B consist of permanent dikes. Project C is a small dam. The dam will have recreation and irrigation benefits as well as the flood control benefits. Facts about the three projects are shown in the following table. Each project has a life of 25 years. The MARR is 10%.
|
Project A |
Project B |
Project C |
|
|
First Cost (millions of $) |
206 |
236 |
402 |
|
Annual Benefits (millions of $) |
26.8 |
32.1 |
56.8 |
|
Annual Operating and Maintenance costs (millions of $) |
2.9 |
2.1 |
4.8 |
Part a - Use present worth to choose the best project
What is the PW of Project A (in millions of dollars rounded to two decimal points eg. x.xx)?
What is the PW of Project B (in millions of dollars rounded to two decimal points eg. x.xx)?
What is the PW of Project C (in millions of dollars rounded to two decimal points eg. x.xx)?
Which Project is the best choice (Enter either 'A', 'B', or 'C')?
Part b - Compute the benefit-cost ratios for the three projects.
What is the BCR for project A (to three decimal points eg. x.xxx)?
What is the BCR for project B (to three decimal points eg. x.xxx)?
What is the BCR for project C (to three decimal points eg. x.xxx)?
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