• Five water treatment plants (WTPs) have been proposed for a city. Each of the plant have a useful life of years and the interest rate is 10% per year. The benefits and costs of the WTPs are listed below. The useful life of WTPA, WTPB, WTPC, WTPD, and WTPE are 20, 25, 30, 35, and 40 years, respectively. Determine the WTP which is economically best. Use incremental B/C ratio method. Benefits and Costs of 5 WTP (USD millions) WTPA WTPB WTPC WTPD WTPE Capital Investment 15 17 14 16 18 Annual Operation and Maintenance Cost 0.65 0.75 0.63 0.64 0.70 Annual Expected Reduction in Fish Damages 3.0 3.2 1.7 3.1 3.5 Salvage 0.2 0.1 0.3 0.2 0.1

• Five water treatment plants (WTPs) have been proposed for a city. Each of the plant have a useful life of years and the interest rate is 10% per year. The benefits and costs of the WTPs are listed below. The useful life of WTPA, WTPB, WTPC, WTPD, and WTPE are 20, 25, 30, 35, and 40 years, respectively. Determine the WTP which is economically best. Use incremental B/C ratio method. Benefits and Costs of 5 WTP (USD millions) WTPA WTPB WTPC WTPD WTPE Capital Investment 15 17 14 16 18 Annual Operation and Maintenance Cost 0.65 0.75 0.63 0.64 0.70 Annual Expected Reduction in Fish Damages 3.0 3.2 1.7 3.1 3.5 Salvage 0.2 0.1 0.3 0.2 0.1

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 10E

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Similar questions

Determine the process to compare alternatives on an equal basis and select the alternative that is wisest from an economic standpoint?
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Present Worth of Alternative A (Round off answer to 2 decimal places)
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