The following data is provided for a PPP project. To the People Benefits Disbenefits $140,000 per year beginning now $55,000 per year Cost Savings culate the conventional benefit/cost ratios using an interest rate of 6% per year and an infinite project period. To the Governm $1.8 million now and $20 3 years $95,000 per ye

The following data is provided for a PPP project. To the People Benefits Disbenefits $140,000 per year beginning now $55,000 per year Cost Savings culate the conventional benefit/cost ratios using an interest rate of 6% per year and an infinite project period. To the Governm $1.8 million now and $20 3 years $95,000 per ye

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

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Locations under consideration for a border patrol station have their costs estimated by the federal government. Use the B/C ratio method at an interest rate of 9% per year to determine which location to select, if any. Location Initial Cost, $ Annual Cost, $ per Year Disbenefits, $ per Year Life, Years The AB/C ratio is North N 2,160,000 480,000 70,000 00 South S 2,900,000 445,000 57,000 00
The following estimates (in $1000 units) have been developed for a security system upgrade at Fairbanks International Airport, FAI. Item Cash Flow First cost, $ 13,000 AW of benefits, $ per year 3,800 FW of disbenefits, year 20, $ 6,750 M&O costs, $ per year 400 Life, years 20 Please calculate your dollar values to the nearest whole dollar. Format 0000 No commas. Please calculate your B/C ratios to 2 decimal places. Format 0.00 Treat any disbenefits as negative benefits and not additional costs. a. Calculate the modified B/C ratio (use AW) at a discount rate of 10% APR, compounded daily. b. Is the project justified? O A. No, the B/C ratio is > 1 O B. Yes, the B/C ratio > 1 Please calculate your dollar values to the nearest whole dollar. Format 0000 No commas. c. Determine the minimum/maximum first cost, FC, that is possible to render the project economically unjustified/justified. $
Using the incremental B/C analysis (AB/C). Determine the best alternative, i=10% First cost O &M Cost/year Benefit/year Salvage value Life in years A 45,000 $4,000 $15,000 $9,000 B $25,000 $1,500 $9,500 $5,000 10 с $35,000 $3,000 $14,000 $7,000 D $15,000 $2,000 $8,000 $3,000
Locations under consideration for a border patrol station have their costs estimated by the federal government. Use the B/C ratio method at an interest rate of 6% per year to determine which location to select, if any. Location North, N South, S Initial cost, $ 1.1 × 106 2.9 × 106 Annual cost, $ per year 480,000 390,000 Disbenefits, $ per year 70,000 40,000 Life, years ∞ ∞
The two alternatives shown are under consideration for improving security at a facility. Determine which one should be selected, if any, based on a B/C analysis. Consider an interest rate of 7% per year and a 10-year study period. Additional information is provided in Table Q 6(b). Page 4 of 5 Table Q 6(b) Alternative 1: Extra Cameras | Alternative 2: New Sensors First cost, $ Annual O&M cost, $ 38000 87000 49000 64000 Annual benefits, $ Annual disbenefits, $ 110000 160000 26000
N5 The following data is provided for a PPP project. To the People To the Government Benefits $130,000 per year beginning now Cost $1.8 million now and $200,000 every 3 years Disbenefits $45,000 per year Savings $90,000 per year Calculate the conventional benefit/cost ratios using an interest rate of 6% per year and an infinite project period.
Apply incremental B/C analysis at an interest rate of 8% per year to determine which alternative should be selected. Use a 20-year study period, and assume the damage costs might occur in year 6 of the study period. Alternative A Alternative B Initial cost, S 600,000 800,000 Annual M&O 50,000 70,000 costs, S/year Potential damage 950,000 250,000 costs, S
Locations under consideration for a border patrol station have their costs estimated by the federal government. Use the B/C ratio method at an interest rate of 11% per year to determine which location to select, if any. Location North N South S Initial Cost, $ 1,360,000 2,900,000 Annual Cost, $ per Year 480,000 365,000 Disbenefits, $ per Year 70,000 24,000 Life, Years The AB/C ratio is Select location N
The two alternatives shown are under consideration for improving security at a county jail in Travis County, New York. Determine which one, if either, should be selected based on a B/C analysis, an interest rate of 7% per year, and a 10-year study period. Extra Cameras (EC) New Sensors (NS) 38,000 87,000 49,000 84,000 100,000 87,000 16,000 First cost, $ Annual M&O. $ per year Benefits, $ per year Disbenefits, $ per year The B/C ratio is Select alternative (Click to select)
A proposal to reduce traffic congestion on Jounieh Highway has a B/C ratio of 1.4. The annual worth of benefits minus disbenefits is $560,000. What is the first cost of the project if the interest rate is 5% per year and the project is expected to be perpetual?* 4,000,000 4,588,208 8,000,000 6,666,667
A public works project has an initial cost of P1 000 000, benefits with a present worth of P 1 500 000, and disbenefits worth of P 400 000. What is the benefit cost ratio? Answer:
A DOT is performing a benefit-cost analysis of a new highway using an analysis period of 40 years as part the required environmental impact assessment of the project. The section of highway is estimated to have a construction cost $230 million dollars. The public benefit in reduced travel time and economic development around the highway is estimated to be $12 million per year for the first 5 years, then decrease by 3% per year for the remainder of the 40 year analysis period as congestion grows and economic development slows. The public disbenefit is estimated to be $1.1 million dollars in year O due to additional congestion and pollution during construction, then average $110,000 per year over the 40-year project life in environmental costs due to increased runoff and vehicle emissions. Using an interest rate of 4%, determine the benefit- cost ratio for this project using public/government version of the B/C ratio. Express your answer to two decimal places.