Discuss the incremental b-c ratio

Assignment Help Finance Basics
Reference no: EM131507061

Question: In the aftermath of Hurricane Thelma, the U.S. Army Corps of Engineers is considering two alternative approaches to protect a freshwater wetland from the encroaching seawater during high tides. The first alternative, the construction of a 5-mile long, 20-foot-high levee, would have an investment cost of $25,000,000 with annual upkeep costs estimated at $725,000. A new roadway along the top of the levee would provide two major benefits:

(1) improved recreational access for fishermen and

(2) reduction of the driving distance between the towns at opposite ends of the proposed levee by 11 miles.

The annual benefit for the levee has been estimated at $1,500,000. The second alternative, a channel-dredging operation, would have an investment cost of $15,000,000. The annual cost of maintaining the channel is estimated at $375,000. There are no documented benefits for the channel-dredging project. Using a MARR of 8% and assuming a 25-year life for either alternative, apply the incremental B-C ratio (!B/!C) method to determine which alternative should be chosen. (Note: The null alternative, Do nothing, is not a viable alternative.)

Reference no: EM131507061

Questions Cloud

Discussion question-linux file system : In This Lesson, you more about the Linux filesystem structure and how to manage and administer the filesystems. In your post, respond to the following:
What is a specific verbal or nonverbal feminine : Do you feel it is accurate? Referencing Bevan and Sole (2014), what is a specific verbal or nonverbal feminine or masculine trait you use in communication?
Working with windows group policy objects : Understanding the design and application of group policies will not only aid you in user management, it will also help you to provide a more secure network.
Best practices for creating organizational units : Within companies, people are hired, fired, change departments, change their names, lose or forget their passwords.
Discuss the incremental b-c ratio : In the aftermath of Hurricane Thelma, the U.S. Army Corps of Engineers is considering two alternative approaches to protect a freshwater wetland.
Determine which bridge design should be selected : Extended Learning Exercise The Fox River is bordered on the east by Illinois Route 25 and on the west by Illinois Route 31.
How many customers per day will be required : The Metropolitan Transit Authority (MTA) has just opened a new subway line (the Orange Line) in its underground transportation network.
Find the breakeven mileage per year : Refer to Example. Assuming gasoline costs $4.00 per gallon, find the breakeven mileage per year between the hybrid vehicle and the gas-only vehicle.
How can learning about pauls journeys : Drawing upon what you have learned from the Book of Acts. How can learning about Paul's journeys help you better understand the establishment of the church?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd