In a modified B/C ratio: Select one: a. M&O costs are put in the denominator. b. Dis-benefits are put in the denominator c. Benefits are subtracted from costs d. M&O costs are put in the numerator.
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- Where is the salvage value placed in a conventional B/C ratio? Why? How is it handled mathematically?Calculate the conventional B-C ratio using AW. Write in four decimal places.Which of the following DOES NOT agree with the definition/description of B/C ratio? A. B/C ratio can have a value less than 0, but the project is not economically feasible. B. A B/C ratio less than 1 means that the benefits are inferior of the costs. C. If conventional B/C ratio is less than 1, so does the modified B/C ratio. D. If the annual costs = annual benefits, the conventional and modified B/C ratios are equal to 0. E. None of these
- Why are benefit cost ratios inappropriate for evaluating alternative projects?In which way(s) is Sen’s (1970) impossibility theorem of project choice superior or inferior to the conventional Cost-Benefit Analysis principles of project choice based on the Hicks-Kaldor compensation test. Following the discovery and production of oil in commercial quantities in Ghana, the government of Ghana in collaboration with other stakeholders in the oil industry endeavors to establish a fertilizer production plant in Takoradi to take advantage of the by-product from crude oil production. As a potential Cost Benefit Analyst, list all the possible benefits and costs associated with the fertilizer plant project; direct, indirect, tangible and intangible, pecuniary and non-pecuniary.Which of the following DOES NOT agree with the definition/description of Benefit-Cost ratio?A. Benefit-Cost ratio can have a value less than 0, but the project is not economically feasible.B. A Benefit-Cost ratio less than 1 means that the benefits are inferior of the costs.C. If conventional Benefit-Cost ratio is less than 1, so does the modified Benefit-Cost ratio.D. If the annual costs = annual benefits, the conventional and modified Benefit-Cost ratios are equal to 0.
- A benefit-cost ratio is showing the relationship between the relative costs and benefits of a proposed project, expressed either in monetary or in qualitative terms. TRUE (or) FALSEA community public works project will cost $92,000 and will benefit five different individuals. Individual Individual Benefit ($) Individual Cost ($) 1 4,500 6,000 2 18,500 15,000 3 19,000 17,000 4 30,000 24,000 5 29,000 30,000 Does this project meet the Pareto efficiency improvement criterion? If possible, revise the cost shares to allow the project to meet the Pareto criterion and to pass a referendum. please use excel with formulasFrom the following data for a PPP project, calculate the (a) conventional, and (b) modified benefit/ cost ratios using an interest rate of 6% per year and an infinite project period. To the People To the Government Benefits: $100,000 per year beginning now Costs: $1.8 million now and $200,000 every 3 years Disbenefits: $60,000 per year Savings: $90,000 per year
- A local government is considering promoting tourism in the city. It will cost$8,000 to develop a plan.111e anticipated annual benefits and costs are as follows:Annual benefits: Increased local income and tax collections $ 125,000Annual support service: Parking lot expansion, restroom. $50,000the patrol car, and street repairIf the city government uses a discount rate of 8% and a study period of fiveyears. is this tourism project justifiable according to the benefit-cost analysis?The following data is provided for a PPP project. To the People To the Government Benefits $145,000 per year beginning now Cost $1.8 million now and $200,000 every 3 years Disbenefits $25,000 per year Savings $105,000 per year Calculate the conventional benefit/cost ratios using an interest rate of 9% per year and an infinite project period.Two alternatives, identified as X and Y, are evaluated using the B/C method. Alternative Y has a higher total cost than X. If the B/C ratios are 1.2 and 1.0 for alternatives X and Y, respectively, which alternative should be selected? Why