Changes to an existing system that monitors and locates gunshots in a community are under consideration. All will reduce the amount of capital and annual operating cost invested and will impact the benefit and disbenefits when measured against the existing system. Conduct a benefit-cost analysis interest rate of 6% using the traditional B/C ratio comparing the options reporting:

a) raw B/C ratio of each option

b) comparison incremental B/C ratio following the comparative B/C ratio method

c) the option that is the best economic choice from the analysis

Option	Purchase Cost Change	Life	Annual Maintenance Cost Change	Annual Benefits Change	Annual Disbenefits Change
A	-6,000	5	-2000	-4000	-1200
B	-10,500	5	-3500	-6600	-1400
C	-15,500	5	-6000	-10,900	-1800

Benefits changes are measured by an increase in response time to scenes and disbenefits are related to responding to scenes that are incorrectly identified by the system. 

Answer rating: 100% (QA)

a Raw BC ratio of each option project A 117 project B 110 project C 1125 b Incremental BC ratio as p... View the full answer