A? state-sponsored Forest Management Bureau is evaluating alternative routes for a new road into a formerly...

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A? state-sponsored Forest Management Bureau is evaluatingalternative routes for a new road into a formerly inaccessibleregion. Three mutually exclusive plans for routing the road providedifferent? benefits, as indicated in table below. The roads areassumed to have an economic life of 50 years, and MARR is 6?% peryear. Which route should be selected according to the? B-C ratio?method? Assume that a roadway must be constructed.
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Route
Construction Costs
Annual Maintenance Cost
Annual Savings in Fire Damage
Annual Recreational Benefit
Annual Timber Access Benefit
A
?350000
4300
?11000
5500?
2500?
B
230000
3000
8000
6500
1400
C
180000
1600
5000
2500
500
Click the icon to view the interest and annuity table fordiscrete compounding when the MARR is 6?% per year.
Perform the incremental? B-C Analysis.? Fill-in the table below.?(Round to four decimal? places.)

Route	Construction Costs	Annual Savings in Fire Damage	Annual Timber Access Benefit
A	?350000	4300	?11000	5500?	2500?
B	230000	3000	8000	6500	1400
C	180000	1600	5000	2500	500

Answer & Explanation Solved by verified expert

4.3 Ratings (643 Votes)

BC ratio present value of benefits present value ofcostsThe present value factor for 60 years and 6 rate with discretecompounding is 161614Route Apresent See Answer

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Transcribed Image Text

A? state-sponsored Forest Management Bureau is evaluatingalternative routes for a new road into a formerly inaccessibleregion. Three mutually exclusive plans for routing the road providedifferent? benefits, as indicated in table below. The roads areassumed to have an economic life of 50 years, and MARR is 6?% peryear. Which route should be selected according to the? B-C ratio?method? Assume that a roadway must be constructed.Copy to Clipboard+ RouteConstruction CostsAnnual Maintenance CostAnnual Savings in Fire DamageAnnual Recreational BenefitAnnual Timber Access BenefitA?3500004300?110005500?2500?B2300003000800065001400C180000160050002500500Click the icon to view the interest and annuity table fordiscrete compounding when the MARR is 6?% per year.Perform the incremental? B-C Analysis.? Fill-in the table below.?(Round to four decimal? places.)