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

  The purpose of the discussion board is to allow students to

the purpose of the discussion board is to allow students to learn through sharing ideas and experiences as they relate

  Describe an agency relationship

Describe an agency relationship and how it may/will take shape for your small company.- what agency disputes might now develop that need to be addressed, and how might you address them?

  A call option on euros is written with a strike price of $1

A call option on euros is written with a strike price of $1.30/euro. Which spot price  maximizes your profit if you choose to exercise the option before maturity?  A) $1.20/euro  B) $1.25/euro

  What is the market forecast of eps for three years ahead

Reverse Engineering with the Abnormal Earnings Growth Model (Medium) Analysts forecast forward earnings of$2.1 l per share and a forecast of $2.67.

  Calculation of equated annual installments for loan

Mr. Jones bought a building for $100,000, payable on the following terms: a $10,000 down payment and 20 equal annual installment payments to include principal and interest of 10 percent per annually.

  Create a brief methodology section for research paper

Create a brief methodology section for research paper. - You can choose between Qualitative or Quantitative methods.

  Computation of expected return based on capital asset

Computation of expected return based on capital asset pricing model and while Black Company stock has a beta of 1.0 and a required return of 12%

  Evaluate the financial health of a corporation

You are trying to evaluate the financial health of a corporation. You need to make the evaluation quickly, so you have time to look up only three line items on the income statement and/or balance sheet.

  Making alteration for goodwill

C resigns on the condition that he be quickly paid the sum because of a great many making alteration for goodwill which is esteemed at Rs. 22,500.

  What is her expected surplus from the cultural festival

Write an expression incorporating her option price, OP, for the festival if the festival takes place. (To do this, equate her expected utility if the festival takes place to her expected utility if the festival does not take place. Also, assume tha..

  Value of account in exactly one year

1. A couple invests $11,691.00 today in a money market fund that pays 6.00% per year. What is the value of this account in exactly one year?

  What was your holding period return

Presume you bought $5,000 worth of a stock one year ago for $35.46. It has since paid a dividend of $0.88 per share. The stock closed up $1.24 today, closing at $39.04 per share. Unfortunately, you sold it at yesterday's close. What was you..

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