5. 7.10 Calculate

(a) the conventional B/C ratio,

(b) the modified B/C ratio, and

(c) the PI for the following cash flow estimates at a discount rate of 10% per year. Compare the resulting values.

Table Summary: Table divided into two columns shows the cash inflow and outflow value at a 10% rate of interest. The column headers are marked from left to right as: item and cash flow, in dollars.

Item Cash Flow PW of benefits, $ 3,800,000 AW of disbenefits, $/year 45,000 First cost, $ 1,200,000 M&O costs, $/year 300,000 Life of project, years 20