In the development of a publicly owned, commercial waterfront area, three possible independent plans are being considered.

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In the development of a publicly owned, commercial waterfront area, three possible independent plans are being considered. Their costs and estimated benefits are as follows: 

PW ($000s) Plan Costs Benefits $123,000 $139,000 A 150,000 135,000 99,000 114,000

a. Which plan(s) should be adopted, if any, if the controlling board wishes to invest any amount required, provided that the B€“C ratio on the required investment is at least 1.0?
b. Suppose that 10% of the costs of each plan are reclassified as disbenefits. What percentage change in the B€“C ratio of each plan results from the reclassification?
c. Comment on why the rank-orderings in (a) are unaffected by the change in (b).

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Engineering Economy

ISBN: 978-0133439274

16th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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