With interest at 10%, what is the benefit-cost ratio for this government project?$208,355Initial CostAdditional costs at the end of year 1 and year2Benefits at end of year 1 and year 2Annual benefits at end of year 3 through year10$23,720/year$0/year$91,825/yearEnter your answer as follow: 12.34

Here we calculate the Benefit cost ratio by using the given data , so the calculation of the…

With interest at 10%, what is the benefit-cost ratio for this government project? Initial Cost $208,355 Additional costs at the end of year 1 and year $23,720/year 2 Benefits at end of year 1 and year 2 $0O/year Annual benefits at end of year 3 through year $91,825/year 10 Enter your answer as follow: 12.34

With interest at 10%, what is the benefit-cost ratio for this government project? Initial Cost $208,355 Additional costs at the end of year 1 and year $23,720/year 2 Benefits at end of year 1 and year 2 $0O/year Annual benefits at end of year 3 through year $91,825/year 10 Enter your answer as follow: 12.34

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q1: Three mutually exclusive alternatives X, Y, and Z are being considered as a permanent solution to an assembly line bottleneck. The data are: [6 marks] Initial Costa Annual Benefit Useful Life (years) Y Z $10k $15k $20k 1.6k 5 1.5k 1.9k 10 15 ⚫ As a prefix in SI units, k is an acronym for kilo, meaning 1,000. Assuming zero salvage value and an annually compounded interest rate of 8% per year, which alternative should be selected based on the AW-criterion. ( Show detailed calculations). Q2: Find out the capitalized cost of a certain investment based on the following: [4 marks] 1. An initial deposit of $100,000 2. Recurring payments of $10,000 each 6 years starting by the end of the first year for infinity. 3. Annual uniform payments of $2,000 starting by the end of year 10 for infinity. Use Interest rate = 6%
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For the following 4 options (one must be chosen), what is the smallest MARR for the "Do Nothing" option to be chosen? Option A Year O Cost ($) Years 1-10 Benefit ($) 5.26% 9.59% 7.09 % 10.69% "Do Nothing" 0 O -1,000 153 B -1,500 207 C -2,000 261
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A project being consider by a local government has the following estimated benefit – cost data - $1000 investment for the first 2 years and then recurring cost of $5000 for the coming 2 years and $8000 for year 5& 6 respectively. Also there are benefits of $20,000, $30,000, $ 30,000 and $20,000 starting from the third year. Consider the interest rate to be 10%, design an optimal solution to perform cost-benefit analysis and conclude if the project is suitable or not.
Q4. The cash flow details of a public project is as follows = BD 250000 Initial cost /investment Annual benefits/revenues = BD 120000 Worth of annual cost Salvage value Interest rate per year 8% and useful lie 30 Years Use the three project evaluation methods( PW, FW, AW) = BD 12,000 = BD 150000
USAA is considering adding a new runway and has 3 options for the runway surface: asphalt, concrete, and a mixture of both. The benefit from all 3 alternatives is the same. Therefore, these projects are cost-based alternatives, and the cash flows are provided in the table below. Using conventional benefit/cost ratio with MARR of 9%, which alternative should be selected? First cost AW of resurfacing cost Asphalt Concrete Mixture $250,000,000 $350,000,000 $400,000,000 $30,000,000 $20,000,000 $10,000,000 Disbenefits at construction time $5,000,000 Life, years Asphalt is better Concrete is better The Mixture is better 20 $10,000,000 20 $12,000,000 20