Easiest method.

Question

Focus on the difference between feasible alternatives. Insulated concrete forms (ICF) can be used as a substitute for conventional wood framing in building construction. Heating and cooling bills will be about 50% less than in a similar wood-framed building in upstate New York. An ICF home will be approximately 10% more expensive to construct than a wood-framed home. For a typical 2,000 ft2 home costing $120 per ft2 to construct in upstate New York and costing $200 per month to heat and cool, how many months does it take for a 2,000 ft2 ICF home to pay back its extraconstruction cost?

Answer 1

Question

Chapter 6, Problem 36P

(a):

To determine

Easiest method.

(b):

To determine

Study period.

(c):

To determine

Calculate the annual worth.

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Focus on the difference between feasible alternatives. Insulated concrete forms (ICF) can be used as a substitute for conventional wood framing in building construction. Heating and cooling bills will be about 50% less than in a similar wood-framed building in upstate New York. An ICF home will be approximately 10% more expensive to construct than a wood-framed home. For a typical 2,000 ft2 home costing $120 per ft2 to construct in upstate New York and costing $200 per month to heat and cool, how many months does it take for a 2,000 ft2 ICF home to pay back its extraconstruction cost?

More than one correct options are possible

A school is overcrowded and there are three options. The do-nothing alternative corresponds to continuing to use modular classrooms. The school can be expanded, or a new school can be built to "split the load" between the schools. User benefits come from improvements in school performance for the expanded or new schools. If a new school is built, there are more benefits because more students will be able to walk to school, the average distance for those who ride the school buses will be shorter, and the schools will be smaller and more "student friendly." The disbenefits for the expanded school are due to the impact of the construction process during the school year. The interest rate is 8%, and the life of each alternative is 20 years. Which alternative should be chosen? What is the incremental ratio for the preferred alternative? Alternative User benefits ($M/yr) User disbenefits ($M) First cost ($M) Operations and maintenance ($M/yr) (a) Use the benefit-cost ratio. (b) Use the…