1.(30)Inthepast,theAframFoundationhasawardedmanygrantstoimprovethelivingandmedicalconditionsofpeopleinwar-tornandpoverty-strickencountriesthroughouttheworld.Inaproposalforthefoundation'sboardofdirectorstoconstructanewhospitalandmedicalcliniccomplexinadeprivedcentralAfricancountry,theprojectmanagerhasdevelopedsomeestimates.Thesearedeveloped,soshestates,inamannerthatdoesnothaveamajornegativeeffectonprimeagriculturallandorlivingareasforcitizens.Thefoundation'sdiscountrateis5.5%peryear. -Investment(Award)amount:$18million(endof)firstyear,decreasingby$3millionperyearfor3additionalyears,andnomoreinvestmentsafterwards. -Annualcosts:$2.5millionperyearfor10years,asproposed -Benefits:Reductionof$9.0millionperyearinhealth-relatedexpensesforcitizens -Disbenefits:$0.6millionperyearforremovalofarablelandandcommercialdistricts (a)(15)UsetheconventionalandmodifiedB/Cmethodstodetermineifthisgrantproposaliseconomicallyjustifiedovera10-yearstudyperiod. (b)(15)Howmuchannualcostsshouldbereducedatleasttojustifythisgrantinthemodifiedmethod? (please show me the solving process either)
1.(30)Inthepast,theAframFoundationhasawardedmanygrantstoimprovethelivingandmedicalconditionsofpeopleinwar-tornandpoverty-strickencountriesthroughouttheworld.Inaproposalforthefoundation'sboardofdirectorstoconstructanewhospitalandmedicalcliniccomplexinadeprivedcentralAfricancountry,theprojectmanagerhasdevelopedsomeestimates.Thesearedeveloped,soshestates,inamannerthatdoesnothaveamajornegativeeffectonprimeagriculturallandorlivingareasforcitizens.Thefoundation'sdiscountrateis5.5%peryear.
-Investment(Award)amount:$18million(endof)firstyear,decreasingby$3millionperyearfor3additionalyears,andnomoreinvestmentsafterwards.
-Annualcosts:$2.5millionperyearfor10years,asproposed
-Benefits:Reductionof$9.0millionperyearinhealth-relatedexpensesforcitizens
-Disbenefits:$0.6millionperyearforremovalofarablelandandcommercialdistricts
(a)(15)UsetheconventionalandmodifiedB/Cmethodstodetermineifthisgrantproposaliseconomicallyjustifiedovera10-yearstudyperiod.
(b)(15)Howmuchannualcostsshouldbereducedatleasttojustifythisgrantinthemodifiedmethod?
(please show me the solving process either)
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