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For flood control purposes, the government is considering three undeveloped sites for a water detention area. The estimated costs associated with each alternative are given below. Use the conventional B-C ratio method, with AW as the equivalent-worth measure, to determine which alternative should be selected at an interest rate of 6% per year. Assume the site will be used for 17 years before being developed for other purposes.
| Site A | Site B | Site C | |
| Initial Cost, $ | 1,350,000 | 1,250,000 | 1,500,00 |
| Annual Maintenance, $/yr | 320,000 | 300,000 | 345,000 |
| Annuel Benefits, $/yr | 1,540,000 | 1,500,000 | 1,595,000 |
| Annual Disbenefits, $/yr | 530,000 | 500,000 | 560,000 |
a) What is the conventional B-C ratio for Site A?
b) What is the conventional B-C ratio for incremental A-B?
Apr 06 2020 Read more Less More
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