(a)
The alternative to be selected using benefit cost ratio and the incremental benefit cost ratio.
Answer to Problem 42P
The alternative to be selected is Alternative
The incremental
Explanation of Solution
Given:
MARR is
Useful life is
Calculation:
Write the expression to calculate the present worth of the cost.
Here, the annual operation and maintenance cost is
Calculate the present worth cost of the alternative Expand.
Substitute
Calculate the present worth cost of the alternative New school.
Substitute
Calculate the present worth benefit of the alternative Expand.
Write the expression to calculate the annual benefit.
Here, the annual benefit is
Calculate the present worth benefit for the Expand.
Substitute
Calculate the present worth benefit for the New school.
Substitute
Write the expression to calculate the benefit-cost ratio.
Here, the present worth benefit is
For Alternative Expand.
Substitute
For Alternative New school.
Substitute
Since the
Hence, the alternative New school is desirable.
Calculate the incremental ratio.
Here the incremental cost between the alternative Expand and New school is
Substitute
Calculate the
Here the incremental benefit between the alternative Expand and New school is
Substitute
Calculate the incremental benefit-cost ratio
Substitute
Conclusion:
The alternative to be selected is Alternative
The incremental
(b)
The alternative to be selected using modified benefit cost ratio and the incremental benefit cost ratio.
Answer to Problem 42P
The alternative to be selected is Alternative
The incremental
Explanation of Solution
Given:
MARR is
Useful life is
Calculation:
Calculate the present worth benefit of the alternative
Write the expression to calculate the annual benefit.
Here, the annual benefit is
Calculate the present worth benefit for the
Substitute
Calculate the present worth benefit for the
Substitute
Write the expression to calculate the benefit-cost ratio.
Here, the present worth benefit is
For Alternative
Substitute
For Alternative
Substitute
Since the
Hence, the alternative
Calculate the incremental ratio.
Here the incremental cost between the alternative
Substitute
Calculate the
Here the incremental benefit between the alternative
Substitute
Calculate the incremental benefit-cost ratio
Substitute
Conclusion:
The alternative to be selected is Alternative
The incremental
(c)
The alternative to be selected using public government version of benefit cost ratio.
Answer to Problem 42P
The alternative to be selected is Alternative
Explanation of Solution
Given:
MARR is
Useful life is
Calculation:
Write the expression to calculate the present worth of the government cost.
Here, the annual operation and maintenance cost is
Calculate the present worth cost of the alternative
Substitute
Calculate the present worth government cost of the alternative
Substitute
Calculate the present worth benefit of the alternative
Write the expression to calculate the annual benefit of the public.
Here, the annual benefit is
Calculate the present worth public benefit for the
Substitute
Calculate the present worth public benefit for the
Substitute
Write the expression to calculate the benefit-cost ratio.
Here, the present worth public benefit is
For Alternative
Substitute
For Alternative
Substitute
Since the
Hence, the alternative
(d)
The alternative to be selected using present worth index.
Answer to Problem 42P
The alternative to be selected is Alternative
Explanation of Solution
Given:
MARR is
Useful life is
Calculation:
Write the expression to calculate the present worth for the alternative
Here, the present worth is
Substitute
Calculate the present worth for alternative
Substitute
The present worth of alternative
Hence, the alternative
Conclusion:
The alternative to be selected is Alternative
(e)
The consistency of data from
Explanation of Solution
Yes, the result remain constant throughout from
The modified benefit cost ratio gives the highest value with an incremental benefit-cost ratio of
(f)
The ethical issues involved in the overcrowded schools dilemma in terms of stakeholders and impacts.
Explanation of Solution
The ethical issues involved in overcrowded school are as follows:
Physiological Problems: Overcrowded classroom reduces the quality of air for the individual breathe which is not good for the health of any individual.
Temperature also influences social behaviour like aggression, impatience.
Psychological and Sociological Problem: The personal and social development of individual are not improved which is one of the basic principles of sending an individual to school.
The impacts of overcrowded school are as follows:
The academic performances of the individuals become poor.
The health of student is at risk.
The Moral corruption of the students as they are not fed with proper moral teachings.
Moreover, there is a lot of stress on teachers to teach such a large gathering of students.
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