Due Date: November $23,2024($Saturday$)11$:$59$ p$.$m$.$ through BB

Q$1-)$ As part of the rehabilitation of the downtown area of a southern U$.$S$.$ city, the Parks and Recreation Department expects to develop the space below several overpasses into basketball, handball, miniature golf, and tennis courts. The estimates are: initial cost of $$190,000,$ life of $20$ years, and annual M&O costs of $$21,000.$ The department expects $20,000$ people per year to use the facilities an average of $2$ hours each. The value of the recreation has been conservatively set at $$1\mathrm{.}00$ per hour. At a discount rate of $6\%$ per year, what is the $\frac{B}{C}$ ratio for the project?

Q$2-)$ The following estimates $($in $$1000$ units$)$ have been developed for a security system upgrade at Chicago's O'Hare Airport. $($a$)$ Calculate the conventional B$/$C ratio at a discount rate of $10\%$ per year. Is the project justified? $($b$)$ Determine the minimum first cost that is possible to render the project just economically unjustified.

$\backslash$table$[[$Item$,$Cash Flow$],[$First cost$,$ $$,13,000],[$AW of benefits, $ per year,$3,800],[$FW of disbenefits, year $20,$ $$,6,750],[$M&O costs, $ per year,$400],[$Life$,$ years,$20]]$

Q$3-)$ An independent over$-$the$-$road $($OTR$)$ truck driver$-$ owner paid $$68,000$ for a used tractor$-$trailer. The salvage value of the rig after $5$ more years of use is expected to be $$36,000.$ The operating cost is $$0\mathrm{.}50$ per mile and the base mileage rate $($i$.$e$.,$ revenue$)$ is $$0\mathrm{.}61$ per mile.

$($a$)$ How many miles per year must the owner drive just to break even at an interest rate of $10\%$ per year?

$($b$)$ If the owner drives $600$ miles per day, how many days per year will be required for breakeven?

Q$4-)$ James, the plant manager at Global Foundries $($GF$),$ received estimates from two contractors to improve traffic flow and repave the parking areas at his production facility. Proposal A includes new curbs, grading, and paving at an initial cost of $$250,000.$ The expected life of the parking lot surface is $4$ years with annual costs for maintenance and repainting of strips of $$3000.$ According to proposal B $,$ the pavement has a higher quality and an expected life of $12$ years. The annual maintenance cost will be negligible for the parking area, but the markings will have to be re$-$painted every $2$ years at a cost of $$5000.$ The MARR is $12\%$ per year. $($a$)$ How much can GF afford to spend on proposal B for the two proposals to break even? $($b$)$ Proposal B first cost came in at $$700,000.$ Now, what is the breakeven initial cost for proposal A$,$ if all other estimates are correct?

Q$5-)$ A regional infrastructure building and maintenance contractor must decide to buy a new compact horizontal directional drilling $($HDD$)$ machine now, or wait and buy it $2$ years from now when a large pipeline contract will require the new equipment. The HDD machine will include an innovative pipe loader design and a maneuverable undercarriage system. The cost of the system is $$68,000$ if purchased now or an estimated $$81,000$ if purchased $2$ years from now. At $i=10\%$ per year and $f=5\%$ per year, determine if the contractor should buy now or later $($a$)$ without any adjustment for inflation, and $($b$)$ with inflation considered.