The local chief executive (LCE) of Pagadian City is considering to build, operate and transfer (BOT) a Public Transportation System as an income generating enterprise for the city, through private sector initiatives. Two proposals have been submitted. The cash flows are shown below. Perform the appropriate techniques of engineering economics using any appropriate measure of economic worth. As a Civil Engineer, make a recommendation to the LCE, based solely on economic considerations. Assume MARR of 10% per year. Copy your Excel spreadsheet in your Answer Sheet. Cash flow/Proposals Initial Cost, P (in million) Maintenance and operating cost, P/year 40-Bus Fleet 50-Bus Fleet 87 P 4.75 million increasing 450,000 per year 95 P 3.85 increasing 5% per year P 12.5 million increasing 15% per year Income, P/year 12.75 million increasing 15% per year Life, years 7 10

The local chief executive (LCE) of Pagadian City is considering to build, operate and transfer (BOT) a Public Transportation System as an income generating enterprise for the city, through private sector initiatives. Two proposals have been submitted. The cash flows are shown below. Perform the appropriate techniques of engineering economics using any appropriate measure of economic worth. As a Civil Engineer, make a recommendation to the LCE, based solely on economic considerations. Assume MARR of 10% per year. Copy your Excel spreadsheet in your Answer Sheet. Cash flow/Proposals Initial Cost, P (in million) Maintenance and operating cost, P/year 40-Bus Fleet 50-Bus Fleet 87 P 4.75 million increasing 450,000 per year 95 P 3.85 increasing 5% per year P 12.5 million increasing 15% per year Income, P/year 12.75 million increasing 15% per year Life, years 7 10

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter14: Multinational Capital Budgeting

Section: Chapter Questions

Problem 1ST

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