Engineering Economy
Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Chapter 10, Problem 20P

(a):

To determine

Calculated the incremental benefit cost ratio.

(b):

To determine

Calculated the new incremental cost benefit ratio

(c):

To determine

Selection of the project.

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* Your answers are incorrect. A 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 = 13.499 Carry all interim calculations to 5 decimal places and then round your final answer to 3 decimal places. The tolerance is ±0.003.
which projects should be considered as the base alternative and the first-choice alternative.
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