EBK ENGINEERING ECONOMY
17th Edition
ISBN: 9780134838229
Author: Sullivan
Publisher: PEARSON
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Chapter 10, Problem 19P
To determine
Selection of the project.
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Four mutually exclusive projects are being considered for a new two-mile jogging track. The life of the track is expected to be 80
years, and the sponsoring agency's MARR is 12% per year. Annual benefits to the public have been estimated by an advisory
committee and are shown below. Use the IRR method to select the best jogging track.
Alternative
A
B
D
Initial Cost
$62,000
$52,000
$150,000
$55,000
Annual benefits
$10,000
$8,000
$20,000
$9,000
IRR
16.1%
15.4%
Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 85 years, and the sponsoring agency's MARR is 9% per year. Annual benefits to the
public have been estimated by an advisory committee and are shown below. Use the B-C method (incrementally) to select the best jogging track.
Initial cost
Annual benefits
B-C ratio
The best jogging track is alternative
A
$52,000
$7,500
1.60
Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.)
Alternative
A
с
B
D
B
$62,000
$10,500
1.88
C…
Alternative
Inc. B-C ratio
1.60
C
$57,000
$9,000
1.75
D
$150,000
$19,000
1.41
Is the alternative acceptable?
Yes
Yes
Yes
Yes
Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to
be 85 years, and the sponsoring agency's MARR is 10% per year. Annual benefits to the public have been estimated
by an advisory committee and are shown below. Use the B-C method (incrementally) to select the best jogging track.
Initial cost
Annual benefits
B-C ratio
A
$60,000
$11,000
1.83
Alternative
D
Alternative
B
$140,000
$21,000
1.50
C
$56,000
$8,500
1.52
$51,000
$7,000
1.37
Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.)
Inc. B-C ratio Is the alternative acceptable?
Yes
1.37
¯
Chapter 10 Solutions
EBK ENGINEERING ECONOMY
Ch. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - A retrofitted space-heating system is being...Ch. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10P
Ch. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Four mutually exclusive projects are being...Ch. 10 - Two municipal cell tower designs are being...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - You have been requested to recommend one of the...Ch. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26FECh. 10 - Prob. 27FECh. 10 - Prob. 28FECh. 10 - Prob. 29FECh. 10 - Prob. 30FECh. 10 - Prob. 31FE
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