Estimate the net present worth - construction management, Civil Engineering

Assignment Help:

Three alternatives are being considered for improving a street intersection.The annual dollar savings on account of the improvement is shown below.  Assume that the intersection will last for 25 years and the interest rate is 5%.  Each of the three improvements is mutually exclusive but provides similar benefits. The alternative that is the most economical is: 

Alternative                         Total cost         Annual Benefit

A                                       $10,000           $  800

B                                       $12,000           1,000

C                                       $19,000           1,400

Solution:

Estimate the Net Present Worth (NPW) for each alternative and identify the most economical alternative for construction. 

Net Present Worth (NPW) = PW of benefits - PW of costs

Use the present worth factor for uniform series: 

  (P/A, i =5%, 25 yrs) = 14.094 (from the Factor Tables)

  NPW(A)  = ($800 x 14.094) - $10,000     = $1,275.20

  NPW(B)  = ($1000 x 14.094) - $12,000   = $2,094.00   

  NPW(C)  = ($1400 x 14.094) - $19,000   =   $731.60

Therefore, select Alternate B because it has the highest net present worth.


Related Discussions:- Estimate the net present worth - construction management

Estimating movement for movement joints, Question Should reversible moi...

Question Should reversible moisture movement be taken into account in estimating movement for movement joints ? Answer Size of concrete is affected by changes in dist

Types of surveys and investigations, Types of Surveys and Investigations: ...

Types of Surveys and Investigations: For preparing a good road project, the following surveys and investigations are needed: (a)        Traffic Surveys (b)       Topogr

States of stress - principal stresses, States of stress - principal stresse...

States of stress - principal stresses: Now let us consider a few cases of solids of the similar material (mild steel) under various states of stress as display in Figure. The

Cost effective buildings, How to construct Semi Ellitical Buildings of 15fe...

How to construct Semi Ellitical Buildings of 15feet dia., in Brick Masonry.

General requirement for civil engineering, Question General requirement for...

Question General requirement for Civil Engineering Works in 1992 Edition, Clause 15.09 details that tying wires for strengthening adjacent to and above Class F4 and F5 closes must

Determine the size and number of aeration basins, Determine the Size and Nu...

Determine the Size and Number of Aeration Basins? For a community of 100,000, determine the size and number of aeration basins in a municipal activated sludge treatment facilit

Coating on concrete – complete im-permeability to moisture, Q. Coating on c...

Q. Coating on concrete – complete im-permeability to moisture? In designing protective coating on concrete structures, stoppage of water ingress by the coating is generally req

How is skin friction and point resistance of a pile computed, Describe the ...

Describe the basic difference in the bearing capacity computation of shallow and deep foundations. How are skin frictions and point resistance of a pile computed?

Show the filter below the revetment, Q. Show the filter below the revetment...

Q. Show the filter below the revetment? A filter placed between the revetment / protection works at the surface and the soil bed below the revetment / protection works. Main fu

Write Your Message!

Captcha
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