Kigamboni is one of the prime areas in the outskirts of Dar Es Salaam. Though Kigamboni...

 

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Kigamboni is one of the prime areas in the outskirts of Dar Es Salaam. Though Kigamboni is expanding yet it is beset by transport problems. Most of the residents of this area use a ferry boat to come to the city centre. The Ministry of Infrastructure is planning to ease the transport problem of Kigamboni residents. There three potential proposals. Proposal A requires acquiring two modern ferry boats. The boats will have more capacity and speed. Option B requires building a bridge that links Kigamboni and city centre. Option C requires constructing a reliable road link (tarmac) between Kigamboni and city centre. The road will pass through Mbagala to the city. The extracted information from the documents is given next. Option A 17B Initial investment in TAS Estimated life span (years) Option C 20B 20 Annual operating costs in TAS 1.8B 1.2B Annual maintenance costs Salvage value 800M 500M 3B IB 3B If the objective is to reduce the annual disbursements which project should be pursued? Use an interest rate of 14% and a Benefit - Cost analysis. 20 Option B 15B 10 2.5B 200M Kigamboni is one of the prime areas in the outskirts of Dar Es Salaam. Though Kigamboni is expanding yet it is beset by transport problems. Most of the residents of this area use a ferry boat to come to the city centre. The Ministry of Infrastructure is planning to ease the transport problem of Kigamboni residents. There three potential proposals. Proposal A requires acquiring two modern ferry boats. The boats will have more capacity and speed. Option B requires building a bridge that links Kigamboni and city centre. Option C requires constructing a reliable road link (tarmac) between Kigamboni and city centre. The road will pass through Mbagala to the city. The extracted information from the documents is given next. Option A 17B Initial investment in TAS Estimated life span (years) Option C 20B 20 Annual operating costs in TAS 1.8B 1.2B Annual maintenance costs Salvage value 800M 500M 3B IB 3B If the objective is to reduce the annual disbursements which project should be pursued? Use an interest rate of 14% and a Benefit - Cost analysis. 20 Option B 15B 10 2.5B 200M