Answered: Lacation Ahernative Benefit (R-C') Cost…

Lacation Ahernative Benefit (R-C') Cost () B/C Ratlo I I-A $45 12 3.75 I-B 30 9 3.33 II-A 35 6 5.83 Il-B 20 12 1.67 II III-A 25 2 12.5 III-B 30 7 4.29

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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Question

The Texas Department of Transportation is considering in improving accident prevention countermeasures on the state's accident-prone public highways and bridges. The following set of projects has been recommended for evaluation at three different locations and assumes the budget is $20 million. All alternatives are mutually independent projects.

Determine the best combination of projects within the budget constraint.
(a) II-Band III-B only
(b) I-A, II-A, and III-B
(c) 1-B, III-A, and III-B
(d) 11-B and IIl-B

Lacation Ahernative Benefit (R-C') Cost () B/C Ratlo
I
I-A
$45
12
3.75
I-B
30
9
3.33
II-A
35
6
5.83
Il-B
20
12
1.67
II
III-A
25
2
12.5
III-B
30
7
4.29

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