Question No 10 (15 Marks) Federal Electricity & Water Authority (FEWA) has two renewal energy alternatives are available for providing energy at a remote government research facility. The cash flow estimates associated with each alternative are given below. Use the conventional B-C ratio method, with Annual Worth as the equivalent-worth measure, to determine which alternative should be selected at an interest rate of 10% per year over a 25-year study period. One alternative must be selected. Alternative I Alternative II Initial cost, $ $1,000,000 $990,000 Annual maintenance costs, S/yr $380,000 $359,500 Annual benefits, $/yr $500,000 $459,500 Salvage value. S Is 17.000 $15.800 Required: [d] 1. Benefit Cost ratio for Alternative 1: [a] 2. Benefit Cost ratio for Alternative II: [C] 3. Incremental Benefit Cost Ratio [b] 4. Alternative selected Options for selection a. 1.06 b. Alternative I c. 0.231 d. 1.02 e. Alternative II f. 1.20 g. 0.30 h. 1.60 Question No 10 (15 Marks) Federal Electricity & Water Authority (FEWA) has two renewal energy alternatives are available for providing energy at a remote government research facility. The cash flow estimates associated with each alternative are given below. Use the conventional B-C ratio method, with Annual Worth as the equivalent-worth measure, to determine which alternative should be selected at an interest rate of 10% per year over a 25-year study period. One alternative must be selected. Alternative I Alternative II Initial cost, $ $1,000,000 $990,000 Annual maintenance costs, S/yr $380,000 $359,500 Annual benefits, $/yr $500,000 $459,500 Salvage value. S Is 17.000 $15.800 Required: [d] 1. Benefit Cost ratio for Alternative 1: [a] 2. Benefit Cost ratio for Alternative II: [C] 3. Incremental Benefit Cost Ratio [b] 4. Alternative selected Options for selection a. 1.06 b. Alternative I c. 0.231 d. 1.02 e. Alternative II f. 1.20 g. 0.30 h. 1.60