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[50] There are four different approaches for completing a public project, shown in the table below. The project has a 50 year life, and the

[50] There are four different approaches for completing a public project, shown in the table below. The project has a 50 year life, and the interest rate is 8%.

Project A

Project B

Project C

Project D

Benefits per year

$350,000

$600,000

$800,000

$1,000,000

Cost

$1,850,000

$2,200,000

$3,000,000

$4,200,000

Salvage

$150,000

$250,000

$310,000

$385,000

O&M Cost per year

$220,000

$300,000

$450,000

$510,000

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image text in transcribed

Conventional B-C ratio with PW: PW(benefits of the proposed project) PW(total costs of the proposed project) B-c = PW(B) I - PW(MV)PW(O&M) (10-1) where PW() present worth of (): B benefits of the proposed project; I- initial investment in the proposed project; MV market value at the end of useful life; O&M- operating and maintenance costs of the proposed project. Modified B-C ratio with PW: PW(B) PW(O&M) 1 - PW(MV) (10-2) B C

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