Problem 09.029 - Two alternative comparison 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 8.00% 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 3.00, 11.00, and 18 of the study period. Initial Cost, $ Annual Maintenance, $/Year Reduced Flood Damage, $ (Round the final answer to four decimal places.) The AB/C ratio is 1.11 The alternative that should be selected is the channel Retention Pond 980,000 92,000 200,000 Channel 2,100,000 30,000 725,000
Problem 09.029 - Two alternative comparison 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 8.00% 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 3.00, 11.00, and 18 of the study period. Initial Cost, $ Annual Maintenance, $/Year Reduced Flood Damage, $ (Round the final answer to four decimal places.) The AB/C ratio is 1.11 The alternative that should be selected is the channel Retention Pond 980,000 92,000 200,000 Channel 2,100,000 30,000 725,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Problem 09.029 - Two alternative comparison
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 8.00% 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
3.00, 11.00, and 18 of the study period.
Initial Cost, $
Annual Maintenance, $/Year
Reduced Flood Damage, $
(Round the final answer to four decimal places.)
The AB/C ratio is
1.11
The alternative that should be selected is the channel
Retention Pond
980,000
92,000
200,000
Channel
2,100,000
30,000
725,000
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