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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
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 to have an economic life of 45 years, and MARR is 9% per year. Which route should be selected according to the B-C ratio method? Assume that a roadway must be constructed. Route A $295,000 B C 230,000 180,000 Cost $3,800 3,200 Construction Annual Maintenance Annual Savings in Annual Recreational Costs Annual Timber Fire Damage Benefit Access Benefit $12,000 6,500 $5,500 $2,800 6,500 1,400 1,800 4,000 3,000 500 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 9% per year. Perform the incremental B-C Analysis. Fill-in the table below. (Round to four decimal places.) Alternative Inc. B-C ratio Is the alternative acceptable? From an incremental analysis, route is the "least objectionable" alternative.
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