Reference no: EM133063799
1) The following data are for two mutually exclusive projects:
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Project A
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Project B
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PW(benefits)
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$19,500,000
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$15,000,000
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PW(operating and maintenance costs)
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$5,000,000
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$8,000,000
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PW(capital costs)
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$5,000,000
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$1,000,000
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(a) What is the benefit-cost ratio for Project A (to two decimal points): ____________
(b) What is the benefit-cost ratio for Project B (to two decimal points): ____________
(c) What is the modified benefit-cost ratio for Project A (to two decimal points)? ____________
(d) What is the modified benefit-cost ratio for Project B (to two decimal points)? ____________
(e) What is the benefit-cost ratio for the increment between projects (to two decimal points)? ____________
(f) What is the Present Worth of Project A? ____________
(g) What is the Present Worth of Project B? ____________
(h) Which is the preferred project (enter either 'A' or 'B')? __________
2) Several new box stores have created additional congestion at an intersection in north St. John's, Newfoundland. City engineers have recommended the addition of a turn lane, a computer controlled, signal and sidewalks, at an estimated cost of $1,500,000 dollars. The annual maintenance costs at the new intersection will be $8,000, but users will save $60,000 per year due to reduced waiting times. In addition, accidents are expected to decline, representing a property and medical savings/benefits of $150,000 dollars per year. The renovation is expected to handle traffic adequately for a 10 year period. The city uses a MARR of 5 percent.
- Determine the BCR for this project ____________
- Determine the BCRM of the project ____________