Q: If the city's discount rate (MARR) is known to be 15%, identify the decision rules for NPV and B/C ratio, and advise the mayor of Gotham City which option should be proceeded with.

Question 1 Gotham City Council that operates automobile parking facilities is currently evaluating a proposal to erect and operate a new parking facility in its downtown area. The service life of each option depends on the contact with landlords. The proposed facility should be completed within 6 months. There will be no salvage value at the end of service life period. Two designs have been identified as follows, where all dollar figures are in thousands: Option Option B Cost of site Cost of structure Annual benefit Annual O&M cost Service Life $240 $1,500 $1,050 $120 $180 $1,100 $900 $100 A