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The recreation department for Southampton, Ontario, is trying to decide how to develop a piece of land. It has narrowed the choices down to tennis
The recreation department for Southampton, Ontario, is trying to decide how to develop a piece of land. It has narrowed the choices down to tennis courts or a swimming pool. The swimming pool will cost $2.7 million to construc and will cost $320,000 per year to operate, but it will bring benefits of $450,000 per year over its 24 -year expected life. Tennis courts would cost $220,000 to build, cost $20,000 per year to operate, and bring $60,000 per year in benefits over their nine-year life. Both projects are assumed to have a salvage value of zero. The appropriate MARR is 3 percent. Complete parts (a) and (b) below. Click the icon to view the table of compound interest factors for discrete compounding periods when i=3% a. Which project is preferable? Use a BCR and an annual worth approach. The BCR for the swimming pool is and the BCR for the tennis courts is because (Round to three decimal places as needed.) b. Which project is preferable? Use a BCRM and an annual worth approach. The BCRM for the swimming pool is and the BCRM for the tennis courts is because (Round to three decimal places as needed.)
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