Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 10, Problem 17P
Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 80 years, and the sponsoring agency’s MARR is 12% per year. Annual benefits to the public have been estimated by an advisory committee and are shown below. Use the B–C method (incrementally) to select the best jogging track.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
DRAW THE CASH FLOW DIAGRAM
Two alternatives are being considered for a certain project. Alternative A has an initial cost of $10,000, uniform annual benefits of $3,000 and a useful life of 6 years. Alternative B has an initial cost of $20,000, uniform annual benefits of $5,000 and a useful life of 6 years. If money is worth 12% annually, determine the better alternative using modified B/C analysis.
The two alternatives shown are under consideration for improving security at a facility.
Determine which one should be selected, if any, based on a B/C analysis. Consider an
interest rate of 7% per year and a 10-year study period. Additional information is provided
in Table Q 6(b).
Page 4 of 5
Table Q 6(b)
Alternative 1: Extra Cameras | Alternative 2: New Sensors
First cost, $
Annual O&M cost, $
38000
87000
49000
64000
Annual benefits, $
Annual disbenefits, $
110000
160000
26000
For mutually exclusive projects are being considered for a 2 mile jog in track. The life of the track is expected to be 75 years and the sponsoring agency MARR is 13% per year annual benefits to the public. I've been estimated by an advisory committee and are shown below used to be – C method incrementally to select the best jogging track.
Chapter 10 Solutions
Engineering Economy
Ch. 10 - The Adams Construction Company is bidding on a...Ch. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - A retrofitted space-heating system is being...Ch. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10P
Ch. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Four mutually exclusive projects are being...Ch. 10 - Two municipal cell tower designs are being...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - You have been requested to recommend one of the...Ch. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26FECh. 10 - Prob. 27FECh. 10 - Prob. 28FECh. 10 - A flood control project with a life of 16 years...Ch. 10 - Prob. 30FECh. 10 - Prob. 31FE
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- A proposal to reduce traffic congestion on Jounieh Highway has a B/C ratio of 1.4. The annual worth of benefits minus disbenefits is $560,000. What is the first cost of the project if the interest rate is 5% per year and the project is expected to be perpetual?* 4,000,000 4,588,208 8,000,000 6,666,667arrow_forwardA county will invest $4,200,000 to clean up a chemical spill that occurred following a natural disaster. At the end of the 9-year planning horizon, an additional $1,000,000 will be spent in restoring the site to an environmentally acceptable condition. The investment is expected to produce net annual benefits that will decrease by 29% each year. The net annual public benefit in the 1st year is estimated to be $2,300,000. Determine the B/C ratio for the investment using a 4% MARR. Click here to access the TVM Factor Table calculator. B/C= Carry all interim calculations to 5 decimal places and then round your final answer to 3 decimal places. The tolerance is ±0.003.arrow_forwardThe Texas Department of Transportation is considering in improving accident prevention countermeasures on the state's accident-prone public highways and bridges. The following set of projects has been recommended for evaluation at three different locations and assumes the budget is $20 million. All alternatives are mutually independent projects. Determine the best combination of projects within the budget constraint.(a) II-Band III-B only(b) I-A, II-A, and III-B(c) 1-B, III-A, and III-B(d) 11-B and IIl-Barrow_forward
- Perform a Benefit/Cost Analysis on the two project options below for a toll plaza renovation. What is the incremental B/C? Which option should be selected? OPTION Y $5,400,000 $2,350,000 $343,000 OPTION Z $14,240,000 S1,915,000 Initial Cost Annual Cost Annual Disbenefits $196,500 Life 00arrow_forwardwhich projects should be considered as the base alternative and the first-choice alternative.arrow_forwardSix sites have been identified for a parking lot in downtown Blacksburg. Because the sites are plots of land, their salvage value and investment cost are identical. A 10-year study period has been specified, and the MARR is 19% per year. Which site should be chosen based on the IRR criterion? Click the icon to view the alternatives description.arrow_forward
- 2arrow_forward5,6,7 search Saved Help S GEarrow_forwardCompany B is considering two alternatives for a certain project. Alternative A has an initial cost of $20,000, uniform annual benefits of $5,000 and a useful life of 6 years. Alternative B has an initial cost of $30,000, uniform annual benefits of $7,000 and a useful life of 6 years. If money is worth 12% annually, determine the better alternative using modified B/C analysis.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education
Valuation Analysis in Project Finance Models - DCF & IRR; Author: Financial modeling;https://www.youtube.com/watch?v=xDlQPJaFtCw;License: Standard Youtube License