The road development authority is evaluating the costs and benefits of three alternative routes for a...

   

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The road development authority is evaluating the costs and benefits of three alternative routes for a mountain road that will connect a previously inaccessible community with the nearest town. This is a social welfare project and therefore the authority is determined to implement it even if there are no economic benefits to the authority However, indirect economic benefits to the government and society are anticipated as indicated in the table below. Three mutually exclusive plans for routing the road are being considered. All three alternatives are assumed to have an economic life of 50 years. The MARR is assumed as 8% per year. Note: All amounts are given in OMR Which investment has B-C ratio nearest to 1.o? Route X Route Y Route Z Construction Cost 185.000 220,000 290,00O Annual maintenance cost 2,500 3.000 4,000 Annual savings on service provision to the community 5.000 7.000 12,000 Annual benefit from tourism 3.600 8,400 Annual benefit from agriculture 900 S00 2,800 Select one O a. Route Z O b. None of these routes O c Route X O d Route Y The road development authority is evaluating the costs and benefits of three alternative routes for a mountain road that will connect a previously inaccessible community with the nearest town. This is a social welfare project and therefore the authority is determined to implement it even if there are no economic benefits to the authority However, indirect economic benefits to the government and society are anticipated as indicated in the table below. Three mutually exclusive plans for routing the road are being considered. All three alternatives are assumed to have an economic life of 50 years. The MARR is assumed as 8% per year. Note: All amounts are given in OMR Which investment has B-C ratio nearest to 1.o? Route X Route Y Route Z Construction Cost 185.000 220,000 290,00O Annual maintenance cost 2,500 3.000 4,000 Annual savings on service provision to the community 5.000 7.000 12,000 Annual benefit from tourism 3.600 8,400 Annual benefit from agriculture 900 S00 2,800 Select one O a. Route Z O b. None of these routes O c Route X O d Route Y

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We have the following information Route X Route Y Route Z Construction Cost 185000 220000 290000 Ann... View the full answer