From the PW, AW, and FW values shown, the conventional B/C ratio is closest to: Ка) 1. 27 (b) 1. 33 (c) 1. 54 (d) 2.76 (e) Any of the above PW, $ AW, $/Year FW, $ First cost 100,000 16,275 259,370 M&O cost 68,798 11,197 178,441 Benefits 245,784 40,000 637,496 Disbenefits 30,723 5,000 79,687 a
Q: When a B/C analysis is conducted, the benefits and costs: (a) Must be expressed in terms of their…
A: Answer - B/C analysis - It is used to evaluate the strength and weakness different options to get…
Q: ight projects are available for selection at Hum-Vee Motors. The listed PW values are determined at…
A: The phrase "minimum acceptable rate of return" (MARR) is used in business and engineering economics…
Q: A local government is considering promoting to urism in the city. It will cost$8,000 to develop a…
A: NPV (net present value) of any project is calculated by subtracting the PV (present value) of…
Q: An alternative has the following cash flows: Benefits of $30,000 per year, Disbenefits of $14,000…
A: The benefit-cost ratio is inversely related to the present value of cost. It means as the present…
Q: Two new rides are being compared by a local amusement park in terms of their annual operating costs.…
A: Part A) Cost-function of both firms is given below: Tummy-Tugger: C(x) = 10000 + 2.50x Head-Buzzer:…
Q: As part of the rehabilitation of the downtown area of a southern U.S. city, the Parks and Recreation…
A: Initial Cost = 194,000 Annual M&O = 12,000 Number of people use the services = 16,000 Average…
Q: Find A. conventional B/C ratio B. modified B/C ratio C. Pl value A government-funded wind-based…
A: Benefit Rate (BCR) is an indicator of the relationship between the costs associated with the…
Q: A city government is considering two types of town-clump sanitary systems. Design A requires an…
A: (a) Time period is denoted by n and interest rate is denoted by i. Benefit cost ratio (BC) for…
Q: Match the concepts in Column A to the definitions in Column B
A: The macroeconomic concepts that deals with determination of the growth rate in an economy in a…
Q: A city engineer must choose between two different routes for a new sewer line. Route 1 is a…
A: *Answer :-
Q: Several alternatives are under consideration to enhance security at a county jail. These…
A: Given: Extra Cameras New Sensors Steel Tubing Access Control First Cost, $ 38,000…
Q: Ken Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal.…
A: In the mentioned question we have been given the existing project proposal and the new upcoming…
Q: As part of the rehabilitation of the downtown area of a southern U.S. city, the Parks and Recreation…
A: Initial cost © is $190,000. Annual cost (AC) is $21,000. The number of people (N) is 20,000. Usage…
Q: A committee of four people submitted the following statements about the attributes to be used in a…
A: Table 1 shows the attributes and its importance.
Q: In Benefit/cost ratio analysis, if the salvage value is used to recover the first cost, it is being…
A: Answer - Given in the question- In Benefit/cost ratio analysis, if salavage value is used to recover…
Q: An engineering student has only 45 minutes before the final exam in her Engineering Economy class.…
A: The cost-efficient ratio can be calculated as follows.
Q: Recent development near Eugene, Oregon, has identified a need for improved access to Interstate 5 at…
A: The formula for calculating benefit and cost is as follows.
Q: An engineer is considering the projects below, all of which can be last indefinitely. If the…
A: We first need to calculate NPV of each option. NPV = Annual Income/ MARR – first cost Machine 1 NPV…
Q: The conventional B/C ratio estimate of 2.1 was reported to the County Commissioners for a proposed…
A:
Q: An engineering firm recently conducted a study to determine its benefit and cost structure. The…
A: Net benefit is maximized when MB = MC.
Q: Two alternatives, identified as X and Y, are evaluated using the B/C method. Alternative Y has a…
A: The cost benefit ratio is used to analyze the costs and benefits of a proposed project.
Q: Which among these pairs would provide a good market feasibility judgment on a given project? a.…
A: Good market feasibility of a given project is very essential for any project to be successful in the…
Q: Medzyme Pharmaceuticals has maintained a 50–50 D-E mix for capital investments. Equity capital has…
A: Initial share of equity (E) is 50% and debt (D) is 50%. Cost of equity (CE) is 11% and cost of debt…
Q: Three attributes are first cost, safety, and environmental concerns. Assigned importance scores are…
A: The weight of environmental concerns can be calculated as follows:
Q: feasibility analysis is typically done during which systems development stage?…
A: Meaning of Managerial Economics: Here, the term managerial economics refers to the process of…
Q: In the Systematic Economic Analysis Technique (SEAT), Step 5 is Compare the alternatives by an…
A: The inductive process can be used to precisely explore an idea or hypothesis to see if it is…
Q: A local government is considering promoting tourism in the city. It will cost$8,000 to develop a…
A: The present value of total benefit can be calculated as follows:
Q: Alternative locations for an advanced wastewater recycling plant are being evaluated using four…
A: Ratings given are 3, 7, 2, 10 Weights given: 0.4, 0.3, 0.2, 0.1
Q: Engineering Economics (Ilustrative Problem): A tunnel through a mountain is being considered as a…
A: Benefit Cost Ratio refers to the ratio of the present values of the sum of the benefits to the…
Q: For the four alternatives described in the table, which project or projects should be selected,…
A: The minimum acceptable rate of return, often being abbreviated as MARR is the minimum rate of return…
Q: Describe the guidelines for selecting a MARR?
A: The Minimum Acceptable Rate of Return (MARR) is the minimum required rate of return on an investment…
Q: Comparison of five mutually exclusive alternatives is shown. One must be accepted. According to the…
A: * SOLUTION :- The OPTION B ( alternative D ) is correct answer. * Explanation :-
Q: The following are methods in economic analysis of public projects except a. benefit-cost ratio b.…
A: Businesses and organizations often have to choose between alternative investment opportunities.…
Q: yst, list
A: The use of the compensation principle in cost-benefit analysis as a means of separation of the…
Q: The cash flows associated with a public-school building repair project are as follows: costs…
A: Given: Benefit=$600,000 Disbenefits=$90000 Costs=$550,000
Q: The length of the maximum payback period depends on: Select one: a. profits from projects only b.…
A: The length of maximum payback period depends on the type of project and the financial situation of…
Q: In a feasible set, such as the one shown here, points INSIDE the set are said to be by points ON the…
A: In a feasible set, such as the ones shown here, points INSIDE the set are said to be inefficient by…
Q: Four independent public sector projects A, B, C and D were evaluated using the B/C ratio. The…
A: Benefit cost ratio (BC ratio) is the ratio of present value of Annual benefits divided by Present…
Q: Which of the following are limitations of the payback period analysis? Select one: a. can lead to…
A: C Time value of money is ignored The payback period refers to the amount of time require at the…
Q: plans are underway for a new stadium for a baseball team. City officials question the number and…
A: Break Even Point: It refers to the production point where the total revenue is equal exactly to the…
Q: All of the following questions may benefit from engineering economics, except for A Determining how…
A: Questions which benefit from engineering economics are as follows: 1) Determining which projects are…
Q: MKBIC Systems is evaluating four projects A, B, C and D that have risks associated with the…
A: To find the best project we will add all the events of prob. Project EUAW = EUAW * Prob. Project A…
Q: Preliminary plans are underway for construction of a new stadium for a major league baseball team.…
A: Break even point in a business is at the point where there is no gain or loss. When total revenue of…
Q: In order to safeguard the public health, environment, public beaches, water quality, and economy of…
A: The costs of these four alternatives are calculated first. The capital-cost is a one-period cost.…
Q: An alternative has the following cash flows: benefits = $50,000 per year; disbenefits = $27,000 per…
A:
Q: The State Legislative Budget Board approved adding 4000 surveillance cameras along the 800-mile…
A: The number of cameras (N) is 4,000. Cost per camera (C) is $300. Additional cost (AD) is $3,200,000.…
Q: Select the BEST cost and benefit analysis technique if the time to obtain the profit is long while…
A: In the investment market, there are various methods to make an economic analysis of a specfiic…
Q: The estimated cost for a multitube cyclone system with a capacity of 60,000 cubic feet per minute is…
A:
Q: For a complete and correct incremental B/C analysis method for multiple alternatives, which of the…
A: Benefit cost ratio is obtained by dividing the benefits with the cot of the project. If the benefit…
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 9 images
- You work for Bellevue Window Products. While performing an analysis for a new window product, you found a report from last year that provided the following information regarding the manufacture of a similar product: annual production rate = 40,000 units; selling price = $70 per unit; fixed production cost = $240,000 per year; variable production cost = $1,700,000 per year; variable selling expenses = $96,000 per year. As a first-cut, you decide to use this information to estimate (a) the breakeven production rate per year, (b) the company’s profit last year, and (c) the annual production rate that would generate a profit of $1,000,000 per year. What are your estimates?Define the term capitalized cost and give a realworld example of something that might be analyzed using a capitalized cost evaluation technique.The fixed cost at Harley Motors is $5 million annually. The main product has revenue of $89 per unit and $45 variable cost. Estimate the following: (a) Breakeven quantity per year; and (b) annual profit if 100,000 units are sold, and if 200,000 units are sold.
- The sheriff of Los Lunas county along the Arizona- Mexico border asked the county to build a new minimum security detention facility for personscaught while attempting to enter the United States illegally. The construction cost will be $22 million, with annual operating costs of $2.1 million. The new facility will create jobs that produce benefits for many local businesses including realtors, restaurants, etc. The benefits are estimated to be $5 million in years 1 and 2, $2.8 million in year 3, and $1.12 million per year beginning in year 4 and continuing through the 30-year life of the facility. At a discount rate of 8% per year, does the conventional B/C ratio indicate that the project is economically justified?The capital investment cost for a switchgrass-fueled ethanol plant with a capacity of 250,000 gallons per year is $6 million. The cost-capacity factor for this particular plant technology is 0.59 for capacities ranging from 200,000 gallons per year to 500,000 gallons per year. What is the estimated capitalinvestment for a similar ethanol plant with a capacity of 450,000 gallons per year?Mid-Valley Industrial Extension Service, a state-sponsoredagency, provides water quality sampling services toall business and industrial firms in a 10-county region.Last month, the service purchased all necessary lab equipmentfor full in-house testing and analysis. Now, an outsourcingcompany has offered to take over this function ona per-sample basis. Data and quotes for the two optionshave been collected. The MARR for government projectsis 5% per year and a study period of 8 years is chosen.In-house: Equipment and supplies initially cost$125,000 for a life of 8 years, an AOCof $15,000, and annual salaries of$175,000. Sample costs average $25.There is no significant salvage valuefor the equipment and supplies currentlyowned.Outsourced: Cost averages $100 per sample for thefirst 5 years, increasing to $125 persample for years 6 through 8. Determine the breakeven number of tests between the two options.
- Mid-Valley Industrial Extension Service, a state-sponsoredagency, provides water quality sampling services toall business and industrial firms in a 10-county region.Last month, the service purchased all necessary lab equipmentfor full in-house testing and analysis. Now, an outsourcingcompany has offered to take over this function ona per-sample basis. Data and quotes for the two optionshave been collected. The MARR for government projectsis 5% per year and a study period of 8 years is chosen.In-house: Equipment and supplies initially cost$125,000 for a life of 8 years, an AOCof $15,000, and annual salaries of$175,000. Sample costs average $25.There is no significant salvage valuefor the equipment and supplies currentlyowned.Outsourced: Cost averages $100 per sample for thefirst 5 years, increasing to $125 persample for years 6 through 8. Use a spreadsheet to graph the AW curves for both options for test loads between 0 and 5000 per year in increments of 1000 tests. What is the…Which is the most efficient analysis method we can use for determining project acceptability on an economic basis?Two methods to control newly discovered poisonous weeds in bar-ditches on the sides of county roads in New Farmendale are under consideration. Method A involves use of a 20-year life lining at an initial cost of $14,000 and an annual maintenance cost of $3 per kilometer (km). Method B involves spraying a chemical that costs $40 per liter. One liter will treat 8 km, but the treatment must be applied four times per year. In determining the number of km per year that would result in breakeven, the variable cost for method B is closest to: (a) $5 per km (b) $15 per km (c) $20 per km (d) $40 per km
- A jalapeno canning company is faced with a make/ buy decision. Cardboard shipping cartons can be purchased for $0.60 each or made in-house. If manufactured, two machines will be required. Machine X will cost $20,000 and have a life of 6 years with a $2000 salvage value. Machine Y will cost $11,000 and have a life of 4 years with no salvage value. The annual maintenance cost for machines X and Y are $6000 and $5000 per year, respectively. A total of four operators will be required for the two machines at a rate of $22.50 per hour per person. In a normal 8-hour day, the four operators and two machines can produce 1000 cartons. The variable cost per carton associated with the in-house option is closest to: (a) $0.0625 (b) $0.10 (c) $0.72 (d) $0.81Chatham Automotive [should/should not] replace the forklifts now since the minimum total EAC for the electric forklifts is $ [blank] which is [lower/higher] than $ [blank], the minimum total EAC for the propane forklifts.Authentic Serai Halia is a catering firm that serves variety of authentic traditional Malaysian cuisine. Wasimuddin AW and Saprang J, the restaurant owners want to expand their successful operations to caterfoods for some major events in a neighboring town. After investigating their market segment, they have narrowed their choices to two proposals. First proposal is to project a capacity of 10 events per month.This would result in a cost of RM2,500 a month plus a cost of RM250 per event. Another proposal would have a capacity of 20 events per month, a cost of RM3,200 per month, and a cost of RM190 per event. The firm would charge RM480 for each event. Determine: (a) The break-even volume for each proposal.(b) The profit (or loss) would each proposal produce if monthly demand is 12 events.(c) If monthly demand is 25 events, which proposal would yield the greater profit?