2 Question 17The Oklahoma City Zoo has proposed adding to their Web site a major segmentproviding a virtual tour of the grounds and animals, suitable for both routine enjoymentand educational purposes in classrooms. Survey data indicate that this will have either aneutral or positive effect upon actual zoo attendance. The Web site will beprofessionally done and have an initial cost of $325,000. Upkeep, refreshing the videos,and developing videos for scientific research and entertainment will cost another$80,000 per year. The zoo is expected to be in operation for an indefinite period;however, a study period of only 10 years for the Web site is to be assumed, with only aresidual (salvage) value of $60,000 for the archival value being anticipated. Interest is7%. An estimated 100,000 persons will visit the e-zoo in the first year, increasing by30,000 each year, and they will receive, on the average, an additional $0.80 of benefitper visit when the new area is complete. On the basis of benefit-cost analysis, shouldthe Web site be supported for funding?(A Yesв) No Question 16The Oklahoma City Zoo has proposed adding to their Web site a major segmentproviding a virtual tour of the grounds and animals, suitable for both routine enjoymentand educational purposes in classrooms. Survey data indicate that this will have either aneutral or positive effect upon actual zoo attendance. The Web site will beprofessionally done and have an initial cost of $325,000. Upkeep, refreshing the videos,and developing videos for scientific research and entertainment will cost another$80,000 per year. The zoo is expected to be in operation for an indefinite period;however, a study period of only 10 years for the Web site is to be assumed, with only aresidual (salvage) value of $60,000 for the archival value being anticipated. Interest is7%. An estimated 100,000 persons will visit the e-zoo in the first year, increasing by30,000 each year, and they will receive, on the average, an additional $0.80 of benefitper visit when the new area is complete. Determine the benefit-cost ratio.(A 1.64B0.970.681.06E 1.43

Cost-benefit analysis: This concept will help to invest in something while considering the cost and…

Question 17 The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour of the grounds and animals, suitable for both routine enjoyment and educational purposes in classrooms. Survey data indicate that this will have either a neutral or positive effect upon actual zoo attendance. The Web site will be professionally done and have an initial cost of $325,000. Upkeep, refreshing the videos, and developing videos for scientific research and entertainment will cost another $80,000 per year. The zoo is expected to be in operation for an indefinite period; however, a study period of only 10 years for the Web site is to be assumed, with only a residual (salvage) value of $60,000 for the archival value being anticipated. Interest is 7%. An estimated 100,000 persons will visit the e-zoo in the first year, increasing by 30,000 each year, and they will receive, on the average, an additional $0.80 of benefit per visit when the new area is complete. On the basis of benefit-cost analysis, should the Web site be supported for funding? Yes B No