From the following data, use the conventional B/C ratio for a project that has a 20-year life to determine if it is economically justified. Use an interest rate of 8% per year. To the People Annual benefits = $105,000 per year Annual disbenefits = $10,000 per year The B/C ratio is The project is_ To the Government First cost = $550,000 Annual cost = $29,000 per year Annual savings: $30,000 per year

The following estimates (in $1000 units) have been developed for a security system upgrade at Chicago’s O’Hare Airport. (a) Calculate the conventional B/C ratio at a discount rate of 10% per year. Is the project justified? (b) Determine the minimum first cost that is possible to render the project just economically unjustified. Item Cash Flow First cost, $ 13,000 AW of benefits, $ per year 3,800 FW of disbenefits, year 20, $ 6,750 M&O costs, $ per year 400 Life, years 20

An alternative has the following cash flows: benefits = $50,000 per year; disbenefits = $27,000 per year; costs = $25,000 per year. The B/C ratio is closest to: (a) 0.92 (b) 0.96 (c) 1.04 (d) 2.00

One of two alternatives will be selected to reduce flood damage in a rural community in central Arizona. The estimates associated with each alternative are available. Use B/C analysis at a discount rate of 8% per year over a 20-year study period to determine which alternative should be selected. For analysis purposes only, assume that the benefits of reduced flood damage are available in years 2, 12, and 18 of the study period. Retention Pond Channel Initial Cost, $ 880,000 3,000,000 Annual Maintenance , $/Year 92,000 30,000 Reduced Flood Damage, $ 200,000 675,000 The AB/C ratio is The alternative that should be selected is the (Click to select) v

The estimated first cost of a permanent national monument is $2 million with annual benefits and disbenefits estimated at $360,000 and $42,000, respectively. The B/C ratio at 6% per year is closest to: (a) 0.16 (b) 0.88 (c) 1.73 (d) 2.65

An Army Corps of Engineers project for improving navigation on the Ohio River will have an initial cost of $6,500,000 and annual maintenance of $130,000. Benefits for barges and paddle wheel touring boats are estimated at $820,000 per year. If the project is assumed to be permanent, use theconventional B/C ratio to determine if it is economically justified at 8% per year.

The B/C ratio for a mosquito control program proposed by the Harris County Department of Health is reported to be 2.1. The person who prepared the report stated that the annual health benefits were estimated to be $400,000, and that disbenefits of $25,000 per year were used in the calculation. He also stated that the costs for chemicals, machinery, maintenance, and labor were estimated at $150,000 per year, but he forgot to list the cost for initiating the program (trucks, pumps, tanks, etc.). If the initial cost was amortized over a 10-year period at 8% per year, what is the estimated initial cost?

From the following data, use the conventional B/C ratio for a project that has a 20-year life to determine if it is economically justified. Use an interest rate of 8% per year. Consequences To the People Annual benefits = $135,000 per year Annual disbenefits = $10,000 per year The B/C ratio is The project is [[(Click to select) To the Government First cost = $700,000 Annual cost Annual savings $141,000 per year $30,000 per year E =

An alternative has the following cash flows: benefits = $50,000 per year; disbenefits $27,000 per year; costs $25,000 per year. The B/C ratio is closest to: 1.04 L 0.92 2.00 0.96