Question: Please help in solving 5.1 and 5.2. Please provide the necessary formulas. Thank You 5.1 Manchester Council are considering building a skate park in the
Please help in solving 5.1 and 5.2. Please provide the necessary formulas. Thank You

5.1 Manchester Council are considering building a skate park in the outskirts of Manchester so that the facility can be used by locals and for sports tournaments can use the facility. The land is currently privately owned by a haulage firm which can be purchased for 200,000. Construction cost for the park is projected to be 400,000, and the additional annual maintenance cost for the facility is estimated to be 10,000. If the Council go ahead with building the facility, the local transport network will also be upgraded at a cost of 40,000. The annual operating costs are estimated to be 50,000 and operating staff will be required at a cost of 55,000. Annual benefits of the facility have been estimated as follows: Tournament rentals = 200,000 Customer rental charges = 60,000 Convenience of updated transport links = 40,000 Additional local economy revenue = 60,000 Using the Modified Benefit-Cost ratio with the AW determine whether the project should go ahead. The study period is 20 years and the MARR is 12% per year. 5.2 There have been some local protests about the new skate park as the local people feel that this will increase congestion and air pollution in the local area. The annual disbenefits to the local area caused by the inconvenience of congestion is estimated to be 80,000 and for the air pollution to be 40,000. Given this additional information apply conventional B-C ratio with AW to determine if the disbenefits affect the decision you made in question 5.2, treat the disbenefits as an additional cost. 5.1 Manchester Council are considering building a skate park in the outskirts of Manchester so that the facility can be used by locals and for sports tournaments can use the facility. The land is currently privately owned by a haulage firm which can be purchased for 200,000. Construction cost for the park is projected to be 400,000, and the additional annual maintenance cost for the facility is estimated to be 10,000. If the Council go ahead with building the facility, the local transport network will also be upgraded at a cost of 40,000. The annual operating costs are estimated to be 50,000 and operating staff will be required at a cost of 55,000. Annual benefits of the facility have been estimated as follows: Tournament rentals = 200,000 Customer rental charges = 60,000 Convenience of updated transport links = 40,000 Additional local economy revenue = 60,000 Using the Modified Benefit-Cost ratio with the AW determine whether the project should go ahead. The study period is 20 years and the MARR is 12% per year. 5.2 There have been some local protests about the new skate park as the local people feel that this will increase congestion and air pollution in the local area. The annual disbenefits to the local area caused by the inconvenience of congestion is estimated to be 80,000 and for the air pollution to be 40,000. Given this additional information apply conventional B-C ratio with AW to determine if the disbenefits affect the decision you made in question 5.2, treat the disbenefits as an additional cost
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