The recreation department for Southampton Ontario is trying to decide how to develop a piece of...
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The recreation department for Southampton Ontario is trying to decide how to develop a piece of land. It has narrowed the choices down to tennis courts or a swimming pool. The swimming pool will cost $2.5 million to construct and will cost $300 000 per year to operate, but will bring benefits of $475 000 per year over its 25-year expected life. Tennis courts would cost $200 000 to build, cost $20 000 per year to operate, and bring $60 000 per year in benefits over their eight-year life. Both projects are assumed to have a salvage value of zero years. The appropriate MARR is 5%. a) Which project is preferable? Use a BCR and an annual worth approach. b) Which project is preferable using a BCRM and an annual worth approach? The recreation department for Southampton Ontario is trying to decide how to develop a piece of land. It has narrowed the choices down to tennis courts or a swimming pool. The swimming pool will cost $2.5 million to construct and will cost $300 000 per year to operate, but will bring benefits of $475 000 per year over its 25-year expected life. Tennis courts would cost $200 000 to build, cost $20 000 per year to operate, and bring $60 000 per year in benefits over their eight-year life. Both projects are assumed to have a salvage value of zero years. The appropriate MARR is 5%. a) Which project is preferable? Use a BCR and an annual worth approach. b) Which project is preferable using a BCRM and an annual worth approach?
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hence BCR for Swimming pool and Tennis Court is 0204 ... View the full answer
Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
Posted Date:
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