Question: 1) The following data are for two mutually exclusive projects: Project A Project B PW(benefits) $19,500,000 $15,000,000 PW(operating and maintenance costs) $5,000,000 $8,000,000 PW(capital costs)
1) The following data are for two mutually exclusive projects:
| Project A | Project B | |
| PW(benefits) | $19,500,000 | $15,000,000 |
| PW(operating and maintenance costs) | $5,000,000 | $8,000,000 |
| PW(capital costs) | $5,000,000 | $1,000,000 |
(a) What is the benefit-cost ratio for Project A (to two decimal points):____________ [1/8]
(b) What is the benefit-cost ratio for Project B (to two decimal points):____________ [1/8]
(c) What is the modified benefit-cost ratio for Project A (to two decimal points)?____________ [1/8]
(d) What is the modified benefit-cost ratio for Project B (to two decimal points)?____________ [1/8]
(e) What is the benefit-cost ratio for the increment between projects (to two decimal points)?____________ [1/8]
(f) What is the Present Worth of Project A?____________ [1/8]
(g) What is the Present Worth of Project B?____________ [1/8]
(h) Which is the preferred project (enter either 'A' or 'B')?__________[1/8]
2) Several new box stores have created additional congestion at an intersection in north St. John's, Newfoundland. City engineers have recommended the addition of a turn lane, a computer controlled, signal and sidewalks, at an estimated cost of $1,500,000 dollars. The annual maintenance costs at the new intersection will be $8,000, but users will save $60,000 per year due to reduced waiting times. In addition, accidents are expected to decline, representing a property and medical savings/benefits of $150,000 dollars per year. The renovation is expected to handle traffic adequately for a 10 year period. The city uses a MARR of 5 percent.
- Determine the BCR for this project ____________ [5/10]
- Determine the BCRM of the project ____________ [5/10)
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