Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![The Department of Public Works and Highways
(DPWH) is evaluating alternative routes for a new
road into a formerly inaccessible region. Two routes
are available and their pertinent data are tabulated
below. The roads are assumed to have an economic
life of 50 years, and the interest rate is 8%. By using
B/C, which route should be selected?
Route A
Route B
1,850,000
20,000
50,000
2,200,000
30,000
70,000
Construction Cost
Maintenance Cost
Annual Savings in Flood
Damage](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5121bb69-8dc7-4ed0-bf9b-cfaa102bb25e%2F4cbb3d4f-9de4-4dbe-a05c-098687372933%2F1fkx6g_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The Department of Public Works and Highways
(DPWH) is evaluating alternative routes for a new
road into a formerly inaccessible region. Two routes
are available and their pertinent data are tabulated
below. The roads are assumed to have an economic
life of 50 years, and the interest rate is 8%. By using
B/C, which route should be selected?
Route A
Route B
1,850,000
20,000
50,000
2,200,000
30,000
70,000
Construction Cost
Maintenance Cost
Annual Savings in Flood
Damage
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