Question: dont use excel, solve by hand Question 4: The Water holding company is considering replacing old networks of pipelines in three different residential zones to
Question 4: The Water holding company is considering replacing old networks of pipelines in three different residential zones to reduce the number of pipe breaks and the associated costs, and to increase the hydraulic capacity in terms of volume of water. However, the current available budget is limited, so the company has to choose one zone to execute. The company is willing to raise the tariff of water meter to compensate the associated costs. The company's annual MARR is 10%. Zone Y 15 Zone X 10 2 million 20 2 million 25 25,000 25,000 1 1.5 Network zone Network length (Km) Replacement Cost (EGP) per Km Reduction in no. of breaks per year Cost of repair per break (the company pays for repairing the break) Water meter tariff (EGP per m of water) Estimated increase in volume of potable water (m? per year) Reduced number of service interruptions for the consumer (water cut off) per year Monetary Value of each service interruption per household Number of households Estimated life (years) 700,000 900,000 10 15 100 150 1200 1000 15 15 1. Preparing for a Benefit-Cost Analysis, answer the following questions: a) What is the annual worth of Net Costs for zones X & Y? b) What is the annual worth of Net Benefits for zones X & Y? c) What is the BC ratio for each zone X & Y? 2. Using BC incremental comparison, which zone is the best alternative
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