Question
In: Economics
9-41 A do-nothing and two mutually exclusive alternatives are being considered for reducing traffic congestion. User...
9-41 A do-nothing and two mutually exclusive alternatives are being considered for reducing traffic congestion. User benefits come from reduced congestion once the project is complete, while user disbenefits are due to increased congestion during construction. The interest rate is 8%, and the life of each alternative is 15 years. Which alternative should be chosen?
Alternative A B
User benefits ($M/yr) 2.1 2.6
User disbenefits ($M) 1.2 2.1
First cost ($M) 6.9 9.9
(a) Use the benefit-cost ratio.
(b) Use the modified benefit-cost ratio.
(c) Use the public/government version of the B/C ratio.
Operations and maintenance ($M/yr) 0.75 0.825
Solutions
Expert Solution
Explanation:-
If you have any dought about this answer
dont give dislike ,tell us your dought in the comment then i can
explain, Please rate me by giving me a like or thumb because it
motivates me to do more work,Thank you.
Rahul Sunny answered 1 year agoRelated Solutions
Two mutually exclusive alternatives are being considered for the environmental protection equipment at a petroleum refinery....
Two mutually exclusive alternatives are being considered for the
environmental protection equipment at a petroleum refinery. One of
these alternatives must be selected. a. Which environmental
protection equipment alternative should be selected? The firm's
MARR is 20% per year. Assume the equipment will be needed
indefinitely. Assume repeatability is appropriate for this
comparison. b. Assume the study period is shortened to five years.
The market value of Alternative B after five years is estimated to
be $16000. Which alternative would...
Two mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are...
Two mutually exclusive design alternatives are being considered.
The estimated cash flows for each alternative are given below. The
MARR is 10% per year. A decision maker must select one of these
alternatives.
A B
Investment cost $50,000 $30,000
Annual Revenue 15,000 10,000
Salvage value 5,000 3,000
Useful life (yrs.) 5 5
For all parts below, do not convert from another form of
equivalent worth; e.g., AW→FW. 1. Compute the AW for Alt A. Based
on this measure, should the...
Two mutually exclusive alternatives are bring considered: A and B. Both alternatives cost $1,200 at the...
Two mutually exclusive alternatives are bring considered: A and
B. Both alternatives cost $1,200 at the present. However, the
pattern of revenue from them is different. Alternative A has the
potential to bring more revenues later in the project life. The
expected revenues of alternative A are: $350, $500, and $850 by the
ends of years one to three, respectively. Alternative B promises
more immediate cash inflow which is expected to diminish with time:
$750, $300, and $100 by the...
Two mutually exclusive alternatives are bring considered: A and B. Both alternatives cost $1,200 at the...
Two mutually exclusive alternatives are bring considered: A and
B. Both alternatives cost $1,200 at the present. However, the
pattern of revenue from them is different. Alternative A has the
potential to bring more revenues later in the project life. The
expected revenues of alternative A are: $350, $500, and $850 by the
ends of years one to three, respectively. Alternative B promises
more immediate cash inflow which is expected to diminish with time:
$750, $300, and $100 by the...
There are three mutually exclusive alternatives being considered. One of the three must be selected, so this...
There are three mutually exclusive alternatives being
considered. One of the three must be selected, so this
is a set of three cost alternatives. MARR is 15% and the
life of each project is 12 years. These projects
are:
Project I
Capital Cost: $130,000
Revenue/Savings: 22,000
Expense/Cost: $12,000
Salvage: $25,000
Project II
Capital Cost: $100,000
Revenue/Savings: $10,000
Expense/Cost: $15,000
Salvage: $20,000
Project III
Capital Cost: $160,000
Revenue/Savings: $10,000
Expense/Cost: $20,000
Salvage: $40,000
please solve asap, thank you!
Three (3) mutually exclusive alternatives are being considered for the production equipment at a toilet tissue...
Three (3) mutually exclusive alternatives are being considered
for the production equipment at a toilet tissue paper factory. The
estimated cash flows for each alternative are given here. (All cash
flows are in thousands.).
Use the EUAW (Equivalent Uniform Annual Worth) method to
determine which equipment alternative, if any should be selected?
The firm’s MARR is 18%. Cash flow diagrams must be included.
A
B
C
Capital investment
2000
4200
7000
Annual revenues
3200
6000
8000
Annual costs
2100
4000...
Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are...
Three mutually exclusive design alternatives are being
considered. The estimated cash flows for each alternative are given
below. The MARR is 12% per year. At the end of the useful life,
the investment will be sold. A decision-maker can select one of
these alternatives or decide to select none of them. Make a
recommendation using the PW method.
X
Y
Z
Investment cost
$275,000
$140,000
$370,000
Annual revenue
$85,840
$53,207
$93,911
Annual cost
$23,183
$14,370
$20,543
Useful life
15 years...
Three mutually exclusive investment alternatives are being considered. The estimated cash flows for each alternative are...
Three mutually exclusive investment alternatives are being
considered. The estimated cash flows for each alternative are given
below. The study period is 30 years and the firm's MARR is 17% per
year. Assume repeatability and reinvestment of positive cash
balances at 17% per year.
a. What is the simple payback period for
Alternative 1?
b. What is the annual worth of Alternative
2?
c. What is the IRR of the incremental cash
flows of Alternative 2 compared to Alternative 1?...
Three mutually exclusive investment alternatives are being considered. The estimated cash flows for each alternative are...
Three mutually exclusive investment alternatives are being
considered. The estimated cash flows for each alternative are given
below. The study period is 30 years and the firm's MARR is 10%
per year. Assume repeatability and reinvestment of positive cash
balances at 10% per year.
a. What is the simple payback period for Alternative 1?
b. What is the annual worth of Alternative 2?
c. What is the IRR of the incremental cash flows of Alternative
2 compared to Alternative 1?...
A manufacturing company is considering two mutually exclusive alternatives. Alternatives &nb
A manufacturing company is considering two mutually
exclusive alternatives.
Alternatives
Alt. A Alt. B
Initial
cost
$ 42,500 $ 70,000
Annual costs
O &
M
$ 6,000 $ 4,000
Annual savings $
18,500 $ 20,000
Residual value $
12,000 $ 25,000
Shelf
life
3 years 6 years
What would be the "advantage" in annual terms of
Alternative B versus Alternative A at 15% interest?
Select one:
a. $ 3020
b. $ 3500
c. $ 7436
d. Alternative B does...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Discuss proactive and defensive marketing in context to the company position in the hypothetical market structure...
- Write a java code that could be used to show the simulation of a tornado. use...
- A Canadian company issues an 8-year term bond with face value of $1,000 and 6% coupon...
- 1. Consider the following nuclides: &
- In general, teams can be described three ways. Name and define each.
- JAVASCRIPT: Please create an array of student names and another array of student grades. - Create...
- Topic - Construction: Structural, loads, tension 1.) Explain why pure tension members are the most efficient...
ADVERTISEMENT