you have been assigned the task of comparing the economic results of three alter
ID: 1198494 • Letter: Y
Question
you have been assigned the task of comparing the economic results of three alternative designs for a state government public works prokect. The estimated values for various economic factors related to the three designs are given below. The MARR being used is 9% and the analysis period is 15 years.
a. Use the conventional benefit/cost ratio method, with AW as the equivalent worth measure, to select the preferred design for the project.
b. use the modified B/C ration method, with PW as the equivalent worth measure, to select the preferred design for the project.
Factor
Factor
1 2 3 Capital Investment $1,240,000 $1,763,000 $1,475,000 Salvage Value (end of year 15) 90,000 150,000 120,000 Annual O & M costs 215,000 204,000 201,000 Annual benefits to user group A 315,000 367,000 355,000 Annual benefits to other user groups 147,800 155,000 130,500Explanation / Answer
you have been assigned the task of comparing the economic results of three alter
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