The Logan Public Library in IA serves long-term residents, 'bedroom community' residents who work in Omaha, and

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The Logan Public Library in IA serves long-term residents, 'bedroom community' residents who work in Omaha, and all of Harrison County. A renovation is planned, especially to include access to more electronic volumes, modernized computer facilities, and quicker check-in and checkout. In addition, two small meeting rooms with modernized e-access are needed. The cost of the renovation, including cabling, will be \(\$ 33,000\), the new equipment will cost \(\$ 21,000\), and evolume access initiation will be \(\$ 17,500\). Maintenance is expected to run additional \(\$ 3,500\) per year, plus \(\$ 4,000\) for renewed e-volume access. The interest rate is 8 percent, the planning horizon is 10 years, and the building renovation is expected to have a salvage value of 30 percent, with no salvage value for equipment or e-volume access. It is estimated that an additional 2,500 visits to the library will occur in the first year, increasing by 500 per year thereafter. It is estimated that the average benefits due to the new facilities, equipment, and access will be \(\$ 2.00\) per person per visit.

a. Should the city government vote to approve the plans? Use PW and calculate \(B-C\).

b. What is the smallest benefit per person that will make this project desirable?

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Principles Of Engineering Economic Analysis

ISBN: 9781118163832

6th Edition

Authors: John A. White, Kenneth E. Case, David B. Pratt

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