IE 3201 Chapter : Fund Eng Econ Ch12
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This project is justifiable based on the benefit-cost analysis. 0. 74 1: incremental analysis: fee collections in the amount of ,000 will be the same ratio. for both alternatives. Therefore, we will not be able to compute the. If this happens, we may select the best alternative based on either the least cost. Since building y is not desirable at the outset, we don"t need an incremental analysis. 12. 7) (a) the benefit-cost ratio for each alternative: alternative a: ,10%,50) (b) select the best alternative based on. Comments: you could select the best alternative based on. Users" annual cost 22= miles sh. 25 per mile 400, 000 cars. Users" annual cost 10= miles sh. 25 per mile 400, 000 cars. Incremental users" benefit , 200, 000 , 000, 000. Since the bc ratio for project a1 is less than 1, we eliminate it from our comparison. Incremental analysis: ordering (a3, a4, a2: a3 versus a4:
