Four mutually exclusive projects are being considered for a new 2 mile jogging track The life of the track is expected to be 80 years, and the sponsoring agencys MARR is 12 per year Annual benefits to the public have been estimated by an advisory committee and are shown on the next page Use the BC ...

Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the

Question:

Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 80 years, and the sponsoring agency€™s is 12% per year. Annual benefits to the public have been estimated by an advisory committee and are shown on the next page. Use the B€“C method (incrementally) to select the best jogging track.

Alternative Initial cost $62,000 $52,000 $150,000 $55,000 $8,000 Annual $20,000 $9,000 $10,000 benefits B-C ratio 1.28 1

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...

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