The government is planning a multiple-purpose hydroelectric project for a river basin. The estimated benefits and costs
Question:
The interest rate is 8% and the life of each project is 40 years.
a. Using benefit-cost analysis, determine which project should be selected.
b. What is the rank-ordering of projects from best to worst?
c. If the projects involved intangible benefits that required considerable judgment in assigning their values, would your recommendation be affected?
Transcribed Image Text:
Initial Cost Annual benefits and costs $30,000,000 $40,000,000 $50,000,000 $1,600,000 $1,250,000 1,800,000 Power sales Flood control saving 225,000 $300,000 $500,000 Irrigation benefits $8,000,000 $450,000 $600,000 Recreation benefits $525,000 $150,000 $350,000 Operating and maintenance costs $220,000 $230,000 $350,000
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a Figures are in thousands Projects BC and E are accept...View the full answer
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Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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