EBK ENGINEERING ECONOMY
16th Edition
ISBN: 9780133819014
Author: Koelling
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 21P
To determine
Calculated the benefit cost ratio.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following three mutually exclusive alternative proposals are being considered for flood proofing a factory building that is located in an area subject to occasional flooding by a
nearby river.
1. Do nothing: Damage to the building in a moderate flood is $11,000 and in a severe flood it is $24,000.
2. Protect the building with a one-time initial expenditure of $20,000 so that the building can withstand moderate flooding without any damage and withstand severe flooding with
only a $10,000 damage.
3. Protect the building with a one-time initial expenditure of $32,000 so that the building can withstand any flooding with no damage at all.
In any year, there is a 19% probability of moderate flooding and a 9% probability of severe flooding. Using a MARR of 6% per year and a service life of 8 years, determine which of
the three alternatives is the most economical.
(a) Calculate EUAC values for each scenario (use negative numbers for costs)
The expected EUAC for the "Do Nothing" alternative…
The following three mutually exclusive alternative proposals are being considered for flood proofing a factory building that is located in an area subject to occasional flooding by a nearby river.
1. Do nothing: Damage to the building in a moderate flood is $11,000 and in a severe flood it is $24,000.
2. Protect the building with a one-time initial expenditure of $20,000 so that the building can withstand moderate flooding without any damage and withstand severe flooding with only a$12,000 damage.
3. Protect the building with a one-time initial expenditure of $32,000 so that the building can withstand any flooding with no damage at all.
In any year, there is a 21% probability of moderate flooding and a 10% probability of severe flooding. Using a MARR of 8% per year and a service life of 12 years, determine which of the three alternatives is the most economical.
(a) Calculate EUAC values for each scenario (use negative numbers for costs)
The expected EUAC for the "Do…
U.S. route 83 passes through the village of Burr Ridge, IL. The engineers of the Transportation Department have proposed constructing a new highway through existing farmland to bypass the city for use by through traffic. The new bypass would however entail an initial construction cost of $40 million and an average annual maintenance cost of $50,000. Assuming the overall user and non-user costs (associated with the positive and negative impacts) of the new project amount to $2 million per year, facility life of 25 years, and an annual nominal discount rate of 6% compounded quarterly, determine whether the project is worthwhile on the basis of agency costs, user costs, and non-user costs.
Chapter 10 Solutions
EBK ENGINEERING ECONOMY
Ch. 10 - The Adams Construction Company is bidding on a...Ch. 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 - A flood control project with a life of 16 years...Ch. 10 - Prob. 30FECh. 10 - Prob. 31FE
Knowledge Booster
Similar questions
- The government of a subtropical country is evaluating the costs and benefits of protecting a rainforest versus cutting it down for timber. The estimated value of the wood is $270$270 million. If the same forest is used as a national park, it may attract 0.030.03 million additional tourists per year. Statistically, each tourist spends $1,600$1,600 inside the country during their stay.How long will it take tourism to exceed the estimated value of the wood in the rainforest? Enter your answer in the box below and round to two decimal places if necessary.arrow_forwardExplain how the viewpoint established before a public sector analysis is started can turn an estimate from being categorized as a disbenefit to a cost, or vice versa.arrow_forwardThe state government has passed a regulation requiring that individual sources install filters to capture emissions of inhalable particles. The regulation will require the that installation of the filters start within the upcoming year. The rule is expected to provide improved respiratory health outcomes for the state's citizens. The benefits and costs (shown in the table below) of the rule will be reckoned at the end of each of the next 12 years. The government has analyzed the costs and benefits of the regulation at an annual discount rate of 3%. Determine the annual and total net benefits of the project for each year of the 12 year period, and the net present value of the completed project, as determined in the EPA's current cost-benefit evaluation of the project.. 1 2 3 4 5 6 7 8 9 10 11 12 Benefits 51,278 45,367 52,876 62,448 53,749 39,723 41,804 46,735 44,286 37,873 51,244 47,836 Costs 43,956 32,556 29,864 39,874 36,843 29287 48,536 52,467 36,118 35,122 39,204 41,344arrow_forward
- A new road is being proposed to create a shortcut from a major residential area to an industrial complex 15 miles away. The current drivers with an AADT of 10,000 travel 27 miles each direction on a curvy, hilly road to the industrial park. Many do not go to the shopping center near the industrial park because of the present substandard road. The new alignment would put a new bridge over the river and cross some wetlands to shorten the distance to 16 miles. The AADT is expected to increase to 12,000. The cost of the new highway will be $80 million, including the bridge. Some rehabilitation estimated at $5 million would have to be done by the state transportation agency on the existing road in 10 years if the new road is not built. If the new road is built, the old road will be turned over to the local governments. The maintenance cost will decrease from $300,000 per mile on the old road to $250,000 per mile on the new road. When the costs of gasoline and travel time are included, the…arrow_forwardA public utility in a medium-size city is considering two cash rebate programs to achieve water conservation. Program 1, which is expected to cost an average of $60 per household, provides a rebate of 75% of the purchase and installation costs of an ultra-low-flush toilet ($100 max). This program is projected to achieve a 5% reduction in overall household water use over a 5-year evaluation period. This will benefit the citizenry to the extent of $1.25 per household per month. Program 2 involves turf replacement with xeric (low water need) landscaping. The program is expected to cost $500 per household, but it will result in reduced water cost estimated at $8 per household per month (on the average). Use the B/C method at a discount rate of 0.5% per month to determine which program, if any, the utility should undertake. The programs may be (a) mutually exclusive, or (b) independentarrow_forwardCalculate the B/C ratio (modified) of a building that houses students during their classroom discussion. Theaccommodation equates to P525,000 annually. However, the annual maintenance is P135,000. Its constructioncosts for about 2.3 M. If sold 20 years from its first operating year, it will amount to P250,000. Take MARR = 15% Please solve using economics formula.arrow_forward
- The public utility in a medium-sized city is considering two cash rebate programs to improve water conservation. Program 1, expected to cost an average of $60 per household, offers a rebate of 75% of the purchase and installation costs of an ultra low-flush toilet ($100 maximum). This programis projected to achieve a 5% reduction in overall household water use over a 5-year evaluation period. This will benefit the citizenry to the extent of $1.25 per household per month. Program 2 is the replacement of turf grasswith xeriscape landscaping. This is expected to cost $500 per household, but it will result in an average reduced water cost estimated at $8 perhousehold per month. At a discount rate of 0.5% per month, use the B/C method to determine which program(s) the utility should undertakeif the programs are (a) mutually exclusive, and (b) independent.arrow_forwardFive years ago a dam was constructed to impound irrigation water and to provide flood protection for the area below the dam. Last winter a 100-year flood caused extensive damage both to the dam and to the surrounding area. This was not surprising, since the dam was designed for a 50-year flood. The cost to repair the dam now will be $250,000. Damage in the valley below amounts to $750,000. If the spillway is redesigned at a cost of $250,000 and the dam is repaired for another $250,000, the dam may be expected to withstand a 100-year flood without sustaining damage. However, the storage capacity of the dam will not be increased and the probability of damage to the surrounding area below the dam will be unchanged. A second dam can be constructed up the river from the existing dam for $1 million. The capacity of the second dam would be more than adequate to provide the desired flood protection. If the second dam is built, redesign of the existing dam spillway will not be necessary, but…arrow_forwardCost of the Plan projects Cost of the Land and expropriation Cost of the Roads and preparation costs Cost of the Retaining wall Cost of the Filling and ground consolidation Cost of the Treatment facilities 520,000 TL 1,680,000 TL 1,300,000 TL 15,800,000 TL 3,650,000 TL 10,900,000 TL 17,500,000 TL Cost of the 70 km 1.25 m diameter transmission line Annual repair-maintenance costs are increased by 1,250,000 TL in the first year and by 6% every year. Other expenses are increasing by 500,000 TL in the first year and by 60,000 TL every year. The price per cubic meter of water is 1,750 TL Useful life 30 years Interest rate 20% What should be the minimum amount of water to be sold per year to cover the costs of this dam?arrow_forward
- Sandra and Mary live next to each other. Sandra has a dog that she walks every day. Sandra has to walk past Mary's front lawn and her dog always pees on Mary's flowers, which causes them to eventually die. Mary will move in a few months but, until then, she estimates she will spend $100 on flowers to replace the ones that die as a result of the daily visits from Sandra's dog. The only solution to this problem is a $50 fence that can be put around Mary's flowers that will protect them from Sandra's dog. a. What term do economists use for the consequences of Sandra's daily walks in this setting? b. Is it socially optimal to have the fence put around the flowers in this case? Why or why not? c. What does the Coase theorem say about how the social optimum could be achieved? Explain what an agreement between Sandra and Mary would look like if Mary has the right to not be bothered by her neighbour's dog.arrow_forwardThe state of Glottamora has $300 million remaining in its budget for the current year. One alternative is to give Glottamorans a one-time tax rebate. Alternatively, two proposals have been made for state expenditures of these funds. The first proposed project is to invest in a new power plant, costing $300 million and having an expected useful life of 20 years. Projected benefits of the new power plant are as follows: Years Benefits per Year ($ Millions) 1 - 5 0 6 - 20 60 The second alternative is to undertake a job retraining program, also costing $100 million and generating the following benefits: Years Benefits per Year ($ Millions) 1 - 5 60 6 - 10 42 11 - 20 12 The state Power Department argues that a 5 percent discount factor should be used in evaluating the projects because that is the government’s borrowing rate. The Human Resources Department suggests using a 12 percent rate because that more nearly equals society’s true…arrow_forwardThe Adams Construction Company is bidding on a project to install a large flood drainage culvert from Dandridge to a distant lake. If they bid $2,000,000 for the job, what is the benefit-cost ratio in view of the following data? The MARR is 6% per year, and the project’s life is 30 years.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning