The table gives annual worth values for five independent projects. The discount
ID: 2798417 • Letter: T
Question
The table gives annual worth values for five independent projects. The discount rate is 8% and the projects are projected to last 20 years. Which project (s) should be selected based on the B/C method?
Project A
Project B
Project C
Project D
AW of first cost
4,000
6,000
6,500
8,750
AW of M&O costs
8,000
9,500
8,000
11,500
AW of benefits
18,500
40,250
32,500
42,500
AW of dis-benefits
4,250
13,950
17,500
18,750
A) Only B
B) All Projects
C) Only C and D
D) Only A and B
Project A
Project B
Project C
Project D
AW of first cost
4,000
6,000
6,500
8,750
AW of M&O costs
8,000
9,500
8,000
11,500
AW of benefits
18,500
40,250
32,500
42,500
AW of dis-benefits
4,250
13,950
17,500
18,750
Explanation / Answer
A) Only B is selcted
Calculation is : AW of benifits - AW of disbenifits - AW of first cost - AW of M&O costs
Project AW based on benefit cost analysis Project A 2250 Project B 10800 Project C 500 Project D 3500Related Questions
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