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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

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jeff jeffy answered 2 years ago
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