Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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It asks for modified B/C ratio.
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Two alternatives, identified as X and Y, are evaluated using the B/C method. Alternative Y has a higher total cost than X. If the B/C ratios are 1.2 and 1.0 for alternatives X and Y, respectively, which alternative should be selected? Why
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Basics Of Engineering Economy
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- 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 =arrow_forwardFor a complete and correct incremental B/C analysis method for multiple alternatives, which of the following does the method NOT require? a. Čalculation of the B/C ratio of each alternative b. The identification of all relevant alternatives c. Ranking the order of the projects (smallest to largest denominator) d. Calculation of the B/C ratio for incremental cash flowsarrow_forwardCost-effectiveness analysis (CEA) differs from benefit/cost analysis (B/C) in that: (a) CEA cannot handle multiple alternatives (b) CEA compares alternatives on the basis of a specific outcome rather than solely on monetary units (c) CEA cannot handle independent alternatives (d) CEA is more time consuming and resource intensivearrow_forward
- The conventional B/C ratio estimate of 2.1 was reported to the County Commissioners for a proposed mosquito control program.The person who prepared the report stated that the health benefits were estimated to be $400,000 per year, and that disbenefits of $25,000 per year were used in the calculation. She also stated that the costs for chemicals, machinery, maintenance, and labor were estimated at $150,000 per year. However, sheforgot to list the cost for initiating the program (trucks, pumps, tanks, etc.). If the project has a 10-year study period and an 8%-per-year discount rate, determine the estimated initial cost.arrow_forwardThe National Environmental Protection Agency has established that 2.5% of the median household income is a reasonable amount to pay for safe drinking water. For a median household income of $45,000 per year, what would the health benefits have to be (in dollars per household per year) for the B/C ratio to be equal to 1.5?arrow_forwardWhich of the following best describes what an input problem measures? resources/time money taxes productionarrow_forward
- A manager wants to compare between two alternatives by the B/C method; if the overall B/C ratio for both alternatives is calculated to be exactly 1.0, which alternative should the manager select? Select one: a. do nothing alternative b. Select both alternatives c. Select the alternative that has the higher cost d. Select the alternative based on the probability to occurarrow_forwardThe modified B/C ratio includes maintenance and operation costs and treat them in a manner similar to benefits. Select one: True Falsearrow_forwardWhy are benefit cost ratios inappropriate for evaluating alternative projects?arrow_forward
- 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 yeararrow_forwardNot use Ai and chatgpt please.arrow_forwardFrom 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 $115,000 per year Annual disbenefits $10,000 per year = Consequences To the Government First cost = $600,000 Annual cost $33,000 per year Annual savings $30,000 per year The B/C ratio is The project is justifiedarrow_forward
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