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A state-sponsored Forest Management Bureau is evaluating alternative routes for a new road into a formerly inaccessible region. Three mutually exclusive plans for routing the
A state-sponsored Forest Management Bureau is evaluating alternative routes for a new road into a formerly inaccessible region. Three mutually exclusive plans for routing the road provide different benefils, as indicated in table below. The roads are assumed to have an economic life of 50 years, and MARR is a% per year which route should be selected according to the B-C ratio method? Assume that a roadway must be constructed. Annual Recreational Benefit $6,000 7,000 3,500 Construction Annual Maintenance Annual Savings in Annual Timber Route Fire Damage Costs $280,000 220,000 Cost $5,000 3,000 1,900 Access Benefit $2,700 1,500 $11,000 7,000 5,000 185,000 500
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