velopment of a publicly owned, commercial waterfront area, three possible independent plans are being considered. Their costs and estimated benefits are given in the table to the right a. Which plan(s) should be adopted, if any, if the controlling board wishes to invest any amount required, provided that the B-C ratio on the required investment is at least 1.07 b. Suppose that 10% of the costs of each plan are reclassified as disbenefits. What percentage change in the B-C ratio of each plan results from the reclassification? c. Comment on why the rank-orderings in (a) are unaffected by the change in (b) a. Perform the B-C analysis. Fill-in the table below (Round to four decimal places) Plan B-C ratio Is the alternative acceptable? Plan A B C PW (5000s) Costs $138,000 125,000 106,000 Benefits $119,000 149,000 139,000

velopment of a publicly owned, commercial waterfront area, three possible independent plans are being considered. Their costs and estimated benefits are given in the table to the right a. Which plan(s) should be adopted, if any, if the controlling board wishes to invest any amount required, provided that the B-C ratio on the required investment is at least 1.07 b. Suppose that 10% of the costs of each plan are reclassified as disbenefits. What percentage change in the B-C ratio of each plan results from the reclassification? c. Comment on why the rank-orderings in (a) are unaffected by the change in (b) a. Perform the B-C analysis. Fill-in the table below (Round to four decimal places) Plan B-C ratio Is the alternative acceptable? Plan A B C PW (5000s) Costs $138,000 125,000 106,000 Benefits $119,000 149,000 139,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

in the development of a publicly owned, commercial waterfront area, three possible independent plans are being
considered. Their costs and estimated benefits are given in the table to the right.
a. Which plan(s) should be adopted, if any, if the controlling board wishes to invest any amount required, provided
that the B-C ratio on the required investment is at least 1.0?
b. Suppose that 10% of the costs of each plan are reclassified as disbenefits. What percentage change in the B-C
ratio of each plan results from the reclassification?
c. Comment on why the rank-orderings in (a) are unaffected by the change in (b)
a. Perform the B-C analysis. Fill-in the table below (Round to four decimal places)
B-C ratio
Plan
A
Is the alternative acceptable?
Plan
ARC
А
B
С
PW (5000s)
Costs
$138,000
125,000
106,000
Benefits
$119,000
149,000
139,000

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