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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 benefits, as indicated in table below. The roads are assumed o have an economic life o 40 years and MARRIs 7% per year, which route should be selected according to the B-C ratio method? Assume that a roadway must be constructed Construction Annual Maintenance Annual Savings in Annual Recreationa Annual Timber Route Cost $4,000 2,700 1,900 Benefit $5,500 6,500 2,500 Costs Access Benefit $2,700 1,600 Fire Damage $290,000 $12,500 225,000 190,000 7,500 5,000 500 Click the oon o view the interest and annuity table for discrete compounding when the MARR s 7% per year. Perform the incremental B-C Analysis. Fill-in the table below. (Round to four decimal places.) Alternative Is the alternative acceptable
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