←A city government is considering two types of town-dump sanitary systems. Design A requires an initial outlay of $437,000with annual operating and maintenance costs of $59,000 for the next 12 years; design B calls for an investment of $346,000with annual operating and maintenance costs of $99,000 per year for the next 12 years. Fee collections from the residentswould again be $75,000 per year. The interest rate is 5%, and no salvage value is associated with either system.Click the icon to view the interest factors for discrete compounding when /= 5% per year.ACTER(a) Using the benefit-cost ratio BC(), which system should be selected?The PIA-B is. (Round to two decimal places.) N11121314151617181920Single PaymentCompoundAmountFactor(F/P, I, N)1.71031.79591.88561.97992.07892.18292.29202.40662.52702.6533PresentWorth Factor(P/F, I, N)0.58470.55680.53030.50510.48100.45810.43630.41550.39570.3769CompoundAmountFactor(F/A, I, N)14.206815.917117.713019.598621.578623.657525.840428.132430.539033.0660Equal Payment SeriesSinking PresentFundWorthFactor(A/F, I, N)0.07040.06280.05650.05100.04630.04230.03870.03550.03270.0302Factor(P/A, I, N)8.30648.86339.39369.898610.379710.837811.274111.689612.085312.4622CapitalRecoveryFactor(A/P, i, N)0.12040.11280.10650.10100.09630.09230.08870.08550.08270.0802

The Benefit-Cost Ratio (BC ratio) is a ratio used in economic analysis to compare the costs and…

A city government is considering two types of town-dump sanitary systems. Design A requires an initial outlay of $437,000 with annual operating and maintenance costs of $59,000 for the next 12 years; design B calls for an investment of $346,000 with annual operating and maintenance costs of $99,000 per year for the next 12 years. Fee collections from the residents would again be $75,000 per year. The interest rate is 5%, and no salvage value is associated with either system. Click the icon to view the interest factors for discrete compounding when /= 5% per year. ACCES + (a) Using the benefit-cost ratio BC(), which system should be selected? The PIA-B is. (Round to two decimal places.)

A city government is considering two types of town-dump sanitary systems. Design A requires an initial outlay of $437,000 with annual operating and maintenance costs of $59,000 for the next 12 years; design B calls for an investment of $346,000 with annual operating and maintenance costs of $99,000 per year for the next 12 years. Fee collections from the residents would again be $75,000 per year. The interest rate is 5%, and no salvage value is associated with either system. Click the icon to view the interest factors for discrete compounding when /= 5% per year. ACCES + (a) Using the benefit-cost ratio BC(), which system should be selected? The PIA-B is. (Round to two decimal places.)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 3E

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