A county in Tennessee is considering the following public interest project. Initial Cost $22.5M Annual Maintenance Cost $525K EUAB $3.3M Given a useful life of 12 years and an interest rate of 4%, the benefit /cost ratio is _____________________. Group of answer choices 1.01 1.13 1.51 1.67 1.48
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A county in Tennessee is considering the following public interest project.
| Initial Cost | $22.5M |
| Annual Maintenance Cost | $525K |
| EUAB | $3.3M |
Given a useful life of 12 years and an interest rate of 4%, the benefit /cost ratio is _____________________.
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- The following estimates (in $1000 units) have been developed for a security system upgrade at Fairbanks International Airport, FAI. 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 Please calculate your dollar values to the nearest whole dollar. Format 0000 No commas. Please calculate your B/C ratios to 2 decimal places. Format 0.00 Treat any disbenefits as negative benefits and not additional costs. a. Calculate the modified B/C ratio (use AW) at a discount rate of 10% APR, compounded daily. b. Is the project justified? O A. No, the B/C ratio is > 1 O B. Yes, the B/C ratio > 1 Please calculate your dollar values to the nearest whole dollar. Format 0000 No commas. c. Determine the minimum/maximum first cost, FC, that is possible to render the project economically unjustified/justified. $Solve this problem using the incremental Benefit - Cost ration with, expected life of 10 years and rate of return of 10% Alternative A Initial cost Annual maintenance cost Estimated annual benefit $50,000 $4,000 $10,000 Alternative B Initial cost $30,000 Annual maintenance cost $3,000 Estimated annual benefit $9,000 a. Select A with B/C =1.14 b. Select B with B/C 1.14 OC. Select B with B/C = 0.14 O d. Reject A with B/C = 1.14"Four alternatives for the manufacture of construction materials, called "Barboncito"", have been identified with the following annual benefits and costs: Alternative Annual Benefits Annual Costs AP 15,000,000 P8,000,000.00 B 14,000,000 7,000,000.00 9,000,000 3,000,000.00 D 11,000,000 3,500,000.00 What is the best alternative?" "Alternative A 'Alternative D"" 'Alternative C"" "Alternative B'
- Calculate the conventional benefit-cost ratio for the alternative: Initial Investment Revenues Costs Salvage Value Useful life MARR Select one: a.1.2960 b.1.3130 c.1.3681 d.1.4659 e.1.2114 250000 80000 22000 50000 9 0.1 17A local government in Virginia is considering three different alternatives for a sewage treatment plant. The type of equipment and technology needed are quite different in each case. The following summarizes the economic data for all the alternatives Alt. B 5,600,000 600,000 1,000,000 Alt. A Alt. C Equipment costs O &M costs/year Annual benefits 4,350,000 450,000 640,000 6,500,000 750,000 1,300,000 The economic life of the project is 40 years. The locality's cost of funds is 8%. Use conventional benefit-cost analysis and incremental analysis to determine which alternative should be recommended. Note that doing nothing is not an alternative.Qutestion 3 Solve this problem using the incremental Benefit - Cost ration with, expected life of 10 years and rate of return of 10% Alternative A Initial cost $50,000 Annual maintenance cost $4,000 Estimated annual benefit $15,000 Alternative B Initial cost $30,000 Annual maintenance cost $3,000 Estimated annual benefit $9,000 a. Select B with B/C=1.14 b. Select B with B/C=1.41 c. Select A with B/C=1.14 d. Reject A with B/C=1.14
- Which among these pairs would provide a good market feasibility judgment on a given project?a. Benefit-Cost Ratio method and breakeven pointb. External Rate of Return method and Internal Rate of Return methodc. Benefit-Cost Ratio method and payback periodd. Minimum Attractive Rate of Return and Present Worth method6. David is opening an Aerial Adventure Park. He has three mutually exclusive design alternatives: Capital investment Annual receipts Annual expenses Design A $175,000 $115,000 $70,000 Design B $350,000 $150,000 $80,000 Design C $300,000 $125,000 $70,000 Market values are negligible. A 10-year study period is to be used and the MARR is 10% per year. Use the FW Method to determine which alternative should be chosen.A major equipment purchase is being considered by Metro Atlanta. The initial cost is determined to be $1,000,000. It is estimated that this new equipment will save $100,000 the first year and increase gradually by $50,000 every year for the next 6 years. MARR=10% a. Using Benefit- Cost analysis, what is the Benefit/Cost ratio for this equipment purchase? b. Based on the Benefit/Cost analysis should Metro Atlanta purchase the equipment?
- Given the data for two alternatives, choose the better alternative using the B/C ratio analysis. MARR = 8% (Hint: If using EUAW, change each first cost to annual fırst then do incremental. If using PW, match the cash flows (rebuy Bottom) before subtracting.) Alternative Bottom Тop First Cost $100,000 $140.000 Operating Costs/Yr 50,000 100,000 60,000 Benefits/Yr 120,000 Maintenance/Yr 30,000 25,000 Life in years 10A certain masonry dam requires 200,000 m³ of gravel for its construction. The contractor found two possible sources for the gravel with the following data: Source A Source B Average distance, gravel pit to dam site 3 km 1.2 km Gravel cost/m³ at pit ➖➖➖➖➖ P10 Purchase price of pit P800,000 Road construction necessary P450,000 Overburden to be removed at P4.20/m³ 90,000m³ ➖➖➖➖➖➖ Hauling cost/m³/km P4 P4 What is the Total Cost of Source AFor the following alternatives compute the Delta B/C ratio of Alternative D minus Alternative A. Use 11% as MARR. (Remember for our convention, salvage value is a minus cost.) Project Initial Investment Annual Benefit Salvage Value Useful Life A B D -1500 -2000 -2500 -5200 350 500 600 850 320 610 820 2300 5 6 7 1.73 1.18 0.92 1.46 1.27