The city of Columbus has identified three options for a public recreation area suitable for informal...
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The city of Columbus has identified three options for a public recreation area suitable for informal family activities and major organized events. As with most alternatives today, there are benefits, disbenefits, costs, and some savings. These have been estimated with the help of an external planning consultant and are identified in the table below. In each case, these are annualized over a 10-year planning horizon. a. Determine the B/C ratio for: Option 1: Benefits Disbenefits Costs Savings Option 1 $430,000 $88,000 $19,000 Option 2 $520,000 Can you tell from these ratios which option should be selected? $210,000 $380,000 $480,000 $130,000 $205,000 $63,000 Option 3 $535,000 b. Determine which option should be selected using the incremental B/C ratio. Option 2: Option 3: Do all calculations to 5 decimal places and round final answer to 2 decimal places. Tolerance is ± 0.02. c. Determine which option should be selected using the B-C for each option. $98,000 d. At what value of Option 2 costs are you indifferent between Option 1 and Option 2? $ Do all calculations to 5 decimal places and round final answer to whole dollar. Tolerance is ± 50. The city of Columbus has identified three options for a public recreation area suitable for informal family activities and major organized events. As with most alternatives today, there are benefits, disbenefits, costs, and some savings. These have been estimated with the help of an external planning consultant and are identified in the table below. In each case, these are annualized over a 10-year planning horizon. a. Determine the B/C ratio for: Option 1: Benefits Disbenefits Costs Savings Option 1 $430,000 $88,000 $19,000 Option 2 $520,000 Can you tell from these ratios which option should be selected? $210,000 $380,000 $480,000 $130,000 $205,000 $63,000 Option 3 $535,000 b. Determine which option should be selected using the incremental B/C ratio. Option 2: Option 3: Do all calculations to 5 decimal places and round final answer to 2 decimal places. Tolerance is ± 0.02. c. Determine which option should be selected using the B-C for each option. $98,000 d. At what value of Option 2 costs are you indifferent between Option 1 and Option 2? $ Do all calculations to 5 decimal places and round final answer to whole dollar. Tolerance is ± 50.
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Fundamentals of Advanced Accounting
ISBN: 978-0077862237
6th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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