Calculate the modified B/C ratio for the followin Initial Cost 600,000 125,000 Annual Benefits Annual Disbenefits Annual O&M costs Projected life 35,470 25,000 20
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- A city government is considering two types of town-clump sanitary systems. Design A requires an initial outlay of $400.000 with annual operating and maintenance costs of $50.000 for the next 15 years: design B calls for an investment of $300.000 with annual operating and maintenance coSIS of $80,000 per year for the next 15 years. Fee collections from the residents would be $85.000 per year. The interest rate is 8%. and no salvage value is associated with either system.(a) By the benefit-cost ratio (BC(i)), which system should be selected?(b) If a new design (design C). which requires an initial outlay of $350,000 and annual operating and maintenance costs of $65,000, is proposed, would your answer to (a) change?An alternative has the following cash flows: benefits = $50,000 per year; disbenefits = $27,000 per year; costs = $25,000 per year. The B/C ratio is closest to: (a) 0.92 (b) 0.96 (c) 1.04 (d) 2.00The following estimates (in $1000 units) have been developed for a security system upgrade at Chicago’s O’Hare Airport. (a) Calculate the conventional B/C ratio at a discount rate of 10% per year. Is the project justified? (b) Determine the minimum first cost that is possible to render the project just economically unjustified. 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
- Calculate the B/C ratio for the following cash flow estimates at a discount rate of 10% per year. Is the project justified? Item Estimate PW of benefits, $ 3,800,000 AW of disbenefits, $/year 45,000 First cost, $ 1,200,000 M&O costs, $/year 300,000 Life, years 20For mutually exclusive projects are being considered for a 2 mile jog in track. The life of the track is expected to be 75 years and the sponsoring agency MARR is 13% per year annual benefits to the public. I've been estimated by an advisory committee and are shown below used to be – C method incrementally to select the best jogging track.A PAM partner company won a tender to provide clean water distribution facilities in an area that is being developed as a tourist area. There are 2 alternatives that can be taken in implementing the project. The first alternative requires construction and installation costs of IDR 10 million per kilometer with maintenance costs of IDR 0.35 million per kilometer per year. The remaining value is estimated at IDR 1 million per kilometer at the end of the 20th year. The second alternative requires construction and installation costs of IDR 7 million per kilometer with maintenance costs of IDR 0.40 million per kilometer per year. The remaining value is estimated at IDR 1.2 million per kilometer at the end of the 20th year. If the company chooses the first alternative, the length of the pipe that must be installed is 10 kilometers, and if the second alternative the length of the cable is 16 kilometers. Determine which alternative is more efficient using MARR = 11%!
- 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 methodThe construction cost of the bypass is $20 million, and $500,000 would be required each year for annual maintenance. The annual benefits to the public have been estimated to be $2.7 million. If the study period is 50 years and the state’s interest rate is 8% per year, should the bypass be constructed?Consider the following cost proposals for the design and construction of a public art display. A B FC 1,200,000 1,800,000 AOC 75,000 100,000 Overhaul Cost in Year 10 900,000 125,000 If the discount rate of 7% is used and the useful life is 10 years before refurbishment, what is B/C ratio of the "delta" project and which option should be chosen? Consider the reduced overhaul cost of B in Year 10 as a "benefit" to the public. Group of answer choices A.0.761 and A B.0.508 and A C. 1.21 and B D. 1.09 and B
- 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.If the capital budget limit is $120,000, the MARR is 10% per year, and all projects have a 10-year life, rank and select from the independent projects using the (a) PI measure, (b) IROR measure, and (c) PW at the MARR. (d) Are different projects selected using the three methods? First Net Income, IROR, PW at Project Cost, $ $ per Year % 10%, $ A −18,000 4,000 18.0 6,578 B −15,000 2,800 13.3 2,205 C −35,000 12,600 34.1 42,422 D −60,000 13,000 17.3 19,879 E −50,000 8,000 9.6 −843An alternative has the following cash flows: Benefits of $30,000 per year, Disbenefits of $14,000 per year, Initial cost of $300,000 and M&O costs of $10,000 per year. If the alternative has an infinite life and the interest rate is 10% per year, the B/C ratio is closest to: Select one: a. 0.80 b. 0.40 c. 0.70 d. 0.32