Q1. The Steuben County school district is considering a proposal to upgrade landscaping on the school properties it operates. The time period for the project, once it begins is assumed to be 20 years, and the school district has determined 7% discount rate to be appropriate for this type of project. Based on the data below. compute the conventional - C ratio for the project, using the present worth method. Should the proposal be accepted? Why? The initial cost of purchasing and planting trees and shrubs is expected to be $200,000. Annual maintenance cost is expected to start at $10,000 in year and then Increase by $1,000 each following year. The benefits to the community from the improved landscaping are estimated to be $15.000 a year during the first 10 years, and $30.000 a year during years 11-20. Assume no salvage value and no other additional cash flows at the end of the project in 20 years from the start.

Q2. The state of Indiana has decided to implement a new food control system, and is choosing between two competing proposals. Each alternative is expected to provide a functioning flood control system for the next 50 years. Proposal A would result in estimated annual benefits to the public of $400,000 due to increased safety, an initial cost of $2,500,000, an annual maintenance cost of $150,000, and annual disbenefits to the public of $100,000. Proposal 8 would result in estimated annual benefits to the public of $350,000, an initial cost of $2,000,000, an annual maintenance cost of $130,000, and annual disbenefits to the public of $50,000 Use the annual worth method to compute the conventional B-C ratio for each proposal, while including disbenefits in the numerator Determine which proposal should be chosen and explain why. Assume 8% MARR, and no additional cash flows at the end of the 50 year project period