Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Need the B-C ratios The city of Oak Ridge is evaluating three mutually exclusive landscaping plans for refurbishing a public greenway. Benefits to the community
Need the B-C ratios
The city of Oak Ridge is evaluating three mutually exclusive landscaping plans for refurbishing a public greenway. Benefits to the community have been estimated by a landscaping committee, and the costs of planting trees and shrubbery, as well as maintaining the greenway, are summarized below. The city's discount rate is 6% per year, and the planning horizon is 7 years andscaping plan Initial planting Annual maintenance Annual community19,500 cost 4,000 4,900 4,600 expense Click the icon to view the interest and annuity table for discrete 17,000 20,000 benefits compounding when the MARR is 6% per year a. Use the B-C ratio method to recommend the best plan when annual maintenance expenses offset annual benefits in the numerator. Perform the incremental B-C Analysis. Fill-in the table below. (Round to four decimal places.) ternative nc ratio s the alternative acceptable Yes Yes No When annual maintenance expenses offset annual benefits in the numerator, A is the best plan b. Repeat Part (a) when annual maintenance expenses add to total costs in the denominator. Which plan is best? Perform the incremental B-C Analysis. Fill-in the table below. (Round to four decimal places.) ternative nc ratio s the alternative acceptable Yes Yes No 0.0000 When annual maintenance expenses add to total costs in the denominator, A is the best plan c. Should the recommendations in Part (a) and (b) be the same? Choose the correct choice below A. Recommendations should be the same because a constant amount subtracted from the denominator and numerator affects the recomputed ratio B. C. Recommendations should not be the same because the B-C ratios changes D. Recommendations should be the same because a constant amount subtracted from the denominator and numerator does not appreciably Recommendations should be the same because the B-C ratios do not change affect the recomputed ratioStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started