long, 20-foot-high levee, would have an investment cost of $25,000,000 with annual upkeep costs estimated at $725,000. A new roadway along the top of the levee would provide two major benefits: (1) improved recreational access for fishermen and (2) reduction of the driving distance between the towns at opposite ends of the proposed levee by 11 miles. The annual benefit for the levee has been estimated at $1,500,000. The second alternative, a channel-dredging operation, would have an investment cost of $15,000,000. The annual cost of maintaining the channel is estimated at $375,000. There are no documented benefits for the channel-dredging project. Using a MARR of 8% and assuming a 25-year life for either alternative, apply the incremental B-C ratio (AB/AC) method to determine which alternative should be chosen. (Note: The null alternative, Do nothing, is not a viable alternative.) (10.9)
long, 20-foot-high levee, would have an investment cost of $25,000,000 with annual upkeep costs estimated at $725,000. A new roadway along the top of the levee would provide two major benefits: (1) improved recreational access for fishermen and (2) reduction of the driving distance between the towns at opposite ends of the proposed levee by 11 miles. The annual benefit for the levee has been estimated at $1,500,000. The second alternative, a channel-dredging operation, would have an investment cost of $15,000,000. The annual cost of maintaining the channel is estimated at $375,000. There are no documented benefits for the channel-dredging project. Using a MARR of 8% and assuming a 25-year life for either alternative, apply the incremental B-C ratio (AB/AC) method to determine which alternative should be chosen. (Note: The null alternative, Do nothing, is not a viable alternative.) (10.9)
Chapter7: Corporations: Reorganizations
Section: Chapter Questions
Problem 30P
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need help with this problem, please provide all the equations and answer all parts clearly. thank you
Transcribed Image Text:long, 20-foot-high levee, would have an investment cost
of $25,000,000 with annual upkeep costs estimated at
$725,000. A new roadway along the top of the levee would
provide two major benefits: (1) improved recreational
access for fishermen and (2) reduction of the driving
distance between the towns at opposite ends of the
proposed levee by 11 miles. The annual benefit for the
levee has been estimated at $1,500,000. The second
alternative, a channel-dredging operation, would have
an investment cost of $15,000,000. The annual cost of
maintaining the channel is estimated at $375,000. There
are no documented benefits for the channel-dredging
project. Using a MARR of 8% and assuming a 25-year
life for either alternative, apply the incremental B-C ratio
(AB/AC) method to determine which alternative should
be chosen. (Note: The null alternative, Do nothing, is not
a viable alternative.) (10.9)
Transcribed Image Text:10-24. In the aftermath of Hurricane Thelma,
the U.S. Army Corps of Engineers is considering
two alternative approaches to protect a freshwater
wetland from the encroaching seawater during high
tides. The first alternative, the construction of a 5-mile
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