The road development authority is evaluating the costs and benefits of three alternative routes for a mountain road that will connect a previously Inaccessible community with the nearest town. This is a social welfare project and therefore the authority is determined to implement it even if theri no economic benehts to the authority. However, indirect economic benefts to the government and society are anticipated as indicated in the table b Three mutually exclusive plans for routing the road are being considered. All three alternatives are assumed to have an economic life of 50 years. The MARR Is assumed as 8% per year. (a) Which investment has highest B-C ratio? (b) Which alternative should be selected if the authority must Implement the project? B-CAnalysis method and glve reasons for your answer. Route X Route Y Route Z Constructi on Cost 185,000 220,000 290,000 Annual maintenance cost 2,500 3,000 4,000 Annual savings on service provision to the community Annual benefit from touri sm 10,000 10,500 15,000 7,600 8,900 9,400

The road development authority is evaluating the costs and benefits of three alternative routes for a mountain road that will connect a previously Inaccessible community with the nearest town. This is a social welfare project and therefore the authority is determined to implement it even if theri no economic benehts to the authority. However, indirect economic benefts to the government and society are anticipated as indicated in the table b Three mutually exclusive plans for routing the road are being considered. All three alternatives are assumed to have an economic life of 50 years. The MARR Is assumed as 8% per year. (a) Which investment has highest B-C ratio? (b) Which alternative should be selected if the authority must Implement the project? B-CAnalysis method and glve reasons for your answer. Route X Route Y Route Z Constructi on Cost 185,000 220,000 290,000 Annual maintenance cost 2,500 3,000 4,000 Annual savings on service provision to the community Annual benefit from touri sm 10,000 10,500 15,000 7,600 8,900 9,400

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter1: An Introduction To Taxation And Understanding The Federal Tax Law

Section: Chapter Questions

Problem 9DQ

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