Question
In: Finance
Two plans have been proposed for a high speed passenger rail line between Cincinnati and Cleveland....
Two plans have been proposed for a high speed passenger rail line between Cincinnati and Cleveland. The plans are summarized in the table below. Costs and benefits are in millions of dollars. Use benefit-cost ratio analysis with an interest rate of 8% to determine which, if either, of the plans should be accepted. Identical replacement assumption is applicable.
| Plan A | Plan B | |
| Econ. Life (Years) | 30 | 15 |
| Salvage Value | $20 | $15 |
| Annual Benefits | $28.5 | $22 |
| Annual M&O Cost | $4 | $2.5 |
| Initial Cost | $260 | $165 |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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Question 1 In general, the threat of high-speed rail as a substitute to airline service is...
Question 1
In general, the threat of high-speed rail as a substitute to
airline service is medium. Applying what you have learned in the
class of air travel demand, please discuss the relationship between
airlines and HSR and explain in which cases high-speed rail can be
a strong rival of airlines.
Question 2
When using Porter’s Five Forces paradigm to analyse the
profitability of airline industry, we mentioned that incumbent
airline is less likely to have cost advantage over new...
The state of Georgia is considering the construction of a high-speed rail system to alleviate traffic...
The state of Georgia is considering the construction of a
high-speed rail system to alleviate traffic congestion, especially
across the Atlanta Metropolis at a cost of $45 billion. Some of the
funding will come from the Deutsche Bank financial institution,
while most of it will be through the issuance of state bonds, with
the rest financed by private investors who will own shares in the
rail system. Explain how financial intermediation is necessary to
make this project a reality. Why...
Please answer questions related to the economics of high speed rail. a Why is it difficult...
Please answer questions related to the economics of high speed
rail.
a Why is it difficult to estimate environmental costs and
benefits and why is it particularly difficult to estimate
environmental costs and benefits into the future?
b How is marginal analysis different from analysis that uses
averages and why do economists prefer marginal analysis to the use
of averages?
c What role does emotion and personal beliefs play in the
economic calculation of benefits and costs and do you...
The state of Georgia is considering the construction of a high-speed rail system to alleviate traffic...
The state of Georgia is considering the construction of a
high-speed rail system to alleviate traffic congestion, especially
across the Atlanta Metropolis at a cost of $45 billion. Some of the
funding will come from the Deutsche Bank financial institution,
while most of it will be through the issuance of state bonds, with
the rest financed by private investors who will own shares in the
rail system. Explain how financial intermediation is necessary to
make this project a reality. Why...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...
Two insulation thickness alternatives have been proposed for a
process steam line subject to severe weather conditions. One
alternative must be selected. Estimated savings in heat loss and
installation cost are given below:
Q: Useful life of 2 cm Thickness alternative is 10 years and
useful life of 5 cm thickness alternative is 5 years. Which
thickness would you recommend for a MARR= 0.13 per year and
negligible market (salvage) values using a)Present
Worth Analysis? b) Annual Worth Analysis? (Use...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...
Two insulation thickness alternatives have been proposed for a
process steam line subject to severe weather conditions. One
alternative must be selected. Estimated savings in heat loss and
installation cost are given below:
Thickness
Installation cost
Annual savings
Maintenace once in each 2 years
2cm
$222000
$80000
$3400
5cm
$360000
$151000
0
a.) Useful lives of both alternatives are 6 years. Which
thickness would you recommend for a MARR= 9% per year and
negligible market (salvage) values using Annual Worth...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...
Two insulation thickness alternatives have been proposed for a
process steam line subject to severe weather conditions. One
alternative must be selected. Estimated savings in heat loss and
installation cost are given below:
THICKNESS
INSTALLATION COST
ANNUAL SAVINGS
MAINTENANCE ONCE IN EACH 2 YEARS
2cm
$125000
$62000
$4800
5cm
$408000
$125000
$0
d.) Useful lives of both alternatives are 8 years. Find the best
alternative using Simple Payback Period Method.
IN EXCEL PLZ!!
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...
Two insulation thickness alternatives have been proposed for a
process steam line subject to severe weather conditions. One
alternative must be selected. Estimated savings in heat loss and
installation cost are given below:
THICKNESS
INSTALLATION COST
ANNUAL SAVINGS
MAINTENANCE ONCE IN EACH 2 YEARS
2cm
$125000
$62000
$4800
5cm
$408000
$125000
$0
b.) Useful life of 2 cm Thickness alternative is 8 years and
useful life of 5 cm thickness alternative is 7 years. Which
thickness would you recommend for...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...
Two insulation thickness alternatives have been proposed for a
process steam line subject to severe weather conditions. One
alternative must be selected. Estimated savings in heat loss and
installation cost are given below:
THICKNESS
INSTALLATION COST
ANNUAL SAVINGS
MAINTENANCE ONCE IN EACH 2 YEARS
2cm
$125000
$62000
$4800
5cm
$408000
$125000
$0
a.) Useful lives of both alternatives are 8 years. Which
thickness would you recommend for a MARR= 9% per year and
negligible market (salvage) values using Present Worth...
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