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

A rural, agriculture-based city that has 17,000 households is required to install treatment systems for the removal of arsenic and other harmful chemicals from its drinking water. The annual cost is projected to be $150 per household per year. Assume that one life will be saved every 3 years as a result of the removal systems. (a) What is the B/C ratio, if a human life is valued at $4.8 million? Use an interest rate of 8% per year and assume the life is saved at the end of each 3-year period. (b) What justifies the project?

The 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?

A consultant, after 3 months of work, reported that the modified B/C ratio for a city-owned hospital heliport project is 1.6. If the initial cost is $1.8 million and the annual benefits are $125,000, what is the amount of the annual M&O costs used in the calculation? The report stated that a discount rate of 7% per year and an estimated life of 35 years were used. The M&O cost is $ .

In a conventional B/C ratio: (a) Disbenefits and M&O costs are subtracted from benefits (b) Disbenefits are subtracted from benefits, and M&O costs are subtracted from costs (c) Disbenefits are subtracted from benefits, and M&O costs are added to costs (d) Disbenefits are added to costs, and M&O costs are subtracted from benefits

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

The benefits associated with a nuclear power plant cooling water filtration project located on the Ohio River are $15,000 per year forever, starting in year 1. The costs are $75,000 in year 0 and $75,000 at the end of year 2. At i= 10% per year, calculate the B/C ratio to determine if the project is justified economically. The B/C ratio will be The project is economically justified +

An Army Corps of Engineers project for improving navigation on the Ohio River will have an initial cost of $6,450,000 and annual maintenance of $135,000. Benefits for barges and paddle wheel touring boats are estimated at $775,000 per year. The project is assumed to be permanent, and the discount rate is 10% per year. Determine if the Corps should proceed with the project. The B/C ratio is The project is economically not justified

The State Highway Department is considering a bypass loop that is expected to save motorists $820,000 per year in gasoline and other automobilerelated expenses. However, local businesses will experience revenue losses estimated to be $135,000 each year. The cost of the loop will be $9,000,000. (a) Calculate the conventional B/C ratio using an interest rate of 6% per year and a 20-year project period. (b) Calculate the conventional B/C ratio without considering the disbenefits. Is the project economically justified with and without considering the revenue losses? (c) Develop the single-cell spreadsheet functions that will answer the two questions above.