The local public works department has six mutually exclusive proposals for consideration. Their expected life is 30 years at an annual interest rate of 8 percent. Details follow:

a. Rank order the proposals based on increasing first cost, considering maintenance as a cost. SYSE 515- Module 7.2 Exercises 4

b. Knowing that the budget of the department is limited, which project would you select?

c. If the largest net benefit is the criterion, which project would you select?

1 980 50 2 3 4 5 2450 6900 750 4750 70 250 30 180 Project Cost (millions) Annual maintenance (millions) Annual benefit 150 50 120 95 8 85