Question 33 (5 points) The city of Fredericton operates automobile parking facil

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Question 33 (5 points) The city of Fredericton operates automobile parking facilities and is evaluating a proposal to erect and operate a structure for parking in the city's downtown area. Two designs for a facility to be built have been identified (all values are in thousands of dollars): Design ADesign B Cost of site Cost of building Annual fee 297 160 $1,964 $ 562 830 $750 $410 $360 Annual maintenance cost Service life 30 years 30 years Calculate the incremental (A-B) benefit-cost ratio if annual interest rate is 10% (Round your answer to 2 decimal points) Your Answer: Question 33 options: Answer Save Question 34 (5 points) The purchase of a car requires a $24,587 loan to be repaid in monthly installments for four years at 12% annual real interest rate. If annual inflation rate is 4% find the exra amount to be paid in 20th month due to inflation (Don't use the $ sign in your answer and round it to 2 decimal points) Your Answer: Question 34 options: Answer Save Question 35 (5 points) The present worth of an investment project is described by the following equation PW 20X 8XY where X and Y are statistically independent discrete random variables with the following PDFs PDF of X Value Probability

Explanation / Answer

Question no :33

Design A : Cost of site + cost of building+ annual fee collection+ annul maintenance cost

= 297+1964+830+410

Annual cash outflow =$ 3,501

PV cash flow for 30 years at 10% = $3,501 * 9.414 ( 1/(1+r)n)

= $32,958.41

Design B : $160 + $ 562 + $ 750 + $ 360

= $1,832

PV factor at 10% for 30 years = $ 1,833 * 9.414

= $ 17,246.44

Incremental cost (A-B) = $32,958.41 - $17,246.44

= $15,711.97

Question no 34

Amount * interest rate * (1+inflation rate )

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