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Suppose that Boston Harbor Island National Park is considering several different alternatives for renovating its Spectacle Island Visitors Center. The alternatives, listed below, differ both

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Suppose that Boston Harbor Island National Park is considering several different alternatives for renovating its Spectacle Island Visitors Center. The alternatives, listed below, differ both in their construction costs and in the amount of savings in energy and maintenance costs they will provide compared to the costs of the current building). All figures are in thousands of dollars. Alternative Construction Energy Maintenance Total Cost Savings Savings Benefit A 5001 400 850 1250 B 1501 50 325 375 50 75 100 175 D 100 100 500 600 E 150 175 275 450 F 200 150 250 400 G 750 25 150 175 H 200 200 600 800 a) According to the fundamental principle of benefit-cost analysis, which alternative should be chosen, and why? b) Suppose now that the National Park Service cannot afford to spend more than $250,000 up front on construction costs. Which alternative would you suggest is best, and why? c) Rank each of the alternatives on the basis of their benefit-cost ratios. d) Would it be economically efficient to choose the option with the highest benefit- cost ratio? Why or why not

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