1
answer
0
watching
316
views
28 Sep 2019
1a) A project has the following costs and benefits. What is the payback period
year
cost
benefits
0
$55,000
1
$15,000
2
$5000
$50,000
3-10
$5,000 each year
1b) Mention two disadvantages of using the payback period analysis
1c) Two mutually exclusive alternatives are being considered for reducing traffic congestion. User benefits come from reduces congestion once the project complete, while user disbenefits are due to increased congestion during construction. The interest rate is 8%, and the life of each alternative is 15 years. Which alternative should be chosen?
A
B
User benefits ($M/yr)
2.1
2.6
User dis-benefits ($M)
1.2
2.1
First cost($M)
6.9
9.9
Operations and maintenance $M/yr)
0.75
0.825
a) Use the benefit-cost ratio
b) Use the government version of the B/C ratio
1a) A project has the following costs and benefits. What is the payback period
| year | cost | benefits |
| 0 | $55,000 | |
| 1 | $15,000 | |
| 2 | $5000 | $50,000 |
| 3-10 | $5,000 each year |
1b) Mention two disadvantages of using the payback period analysis
1c) Two mutually exclusive alternatives are being considered for reducing traffic congestion. User benefits come from reduces congestion once the project complete, while user disbenefits are due to increased congestion during construction. The interest rate is 8%, and the life of each alternative is 15 years. Which alternative should be chosen?
| A | B | |
| User benefits ($M/yr) | 2.1 | 2.6 |
| User dis-benefits ($M) | 1.2 | 2.1 |
| First cost($M) | 6.9 | 9.9 |
| Operations and maintenance $M/yr) | 0.75 | 0.825 |
a) Use the benefit-cost ratio
b) Use the government version of the B/C ratio
Darryn D'SouzaLv10
29 Sep 2019
