Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please write the CBA analysis for these two options (10 points) Option A requires the purchase of a garbage collection vehicle that needs a two-person

Please write the CBA analysis for these two options (10 points)

Option A requires the purchase of a garbage collection vehicle that needs a two-person crew. The vehicle will cost $60,000 and each worker will be paid $12,000 a year. The city would pick up 300 tons of garbage annually, and for each ton of garbage collected, it would charge a $400 fee. The city would have annual revenue of $120,000 (300 $400) from this operation.

Option B requires a vehicle for a three-person crew. The vehicle will cost $80,000 and each worker will be paid $10,000 annually. With this option, the citys garbage collection capacity would be 300 tons annually, so the annual revenue would be $120,000 (300 $400).

Using a five-year period and a discount rate of 5 percent, which option should be recommended in the budget request?

Please fill in the correct answer in each blank provided below. Project A.

NPV

Present value of Benefits

Present value of Costs

Please fill in the correct answer in each blank provided below. Project B.

NPV

Present value of Benefits

Present value of Costs

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fearless Finances A Timeless Guide To Building Wealth

Authors: Cassandra Cummings

1st Edition

1400230381, 978-1400230389

More Books

Students also viewed these Finance questions