Question
The city of Johor is considering extending the runways of its Senai Airport so that commercial jets can use the facility. The land necessary for
The city of Johor is considering extending the runways of its Senai Airport so that commercial jets can use the facility. The land necessary for the runway extension is currently a farmland that can be purchased for RM350 000. Construction costs for the runaway extension are projected to be RM600 000, and the additional annual maintenance costs for the extension are estimated to be RM22 500. The annual operating and maintenance cost for the terminal are estimated at RM75 000. Finally, the projected increase in flights will require the addition of two air traffic controllers at an annual cost of RM100 000. Annual benefits of the runaway extension have been estimated as follows: RM325 000 Rental receipts from airlines leasing space at the facility RM65 000 Airport tax charged to passengers RM50 000 Convenience benefit for residents of Johor RM50 000 Additional tourism dollars for Johor Apply the B-C ratio method with a study period of 20 years and MARR of 10% per year to determine whether the runaways at Johor Senai Airport should be extended.
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