use spreadsheet analysis and discount rate of 4% per year to determine if either port should be constructed

9.25 A country with rapid economic expansion has contracted for an economic evaluation PROBLEMS 337 of possibly building a new container port to augment the current port. The west coast site has deeper water so the dredging cost is lower than that for the east coast site. Also, the redredging of the west site will be re- quired only every 6 years while the east site must be reworked each 4 years. Redredging, which is expected to increase in cost by 10% each time will not take place in the last year of a port's commercial life. Disbenefitesti mates vary from west(fishing revenue loss) to ease (fishing and resort revenue losses). Fees to shippers per 20-TOESTDequivalent are expected to be higher at the west site due to greater difficulty in handling ships be cause of the ocean currents present in the area and a higher cost of labor in this area of the country. All estimates are summarized below in S1 million, except annual revenue and life. Use spreadsheet analysis and a dis- count rate of 4% per year to determine ifci ther port should be constructed. It is not nec essary that the country build either port since one is already operating successfully West Coast Site East Coast Site 21 5 12 initials Year Year 1 Dredging.com S. year Annual MRO year Kerurting dredio 1.5 OS 2 cacho years with increise of 10 bin 12 each 4 years with increase arch 2 million yeur $2.50 each Annual distenelits S/year Annual Tees number of 20-fo SI Sooner Ce life. munet a $2 each 20 12 of possibly building a new container port to augment the current port. The west coast site has deeper water so the dredging cost is lower than that for the east coast site. Also, the redredging of the west site will be re- quired only every 6 years while the east site must be reworked each 4 years. Redredging, which is expected to increase in cost by 10% each time, will not take place in the last year of a port's commercial life. Disbenefit esti- mates vary from west (fishing revenue loss) to east (fishing and resort revenue losses). Fees to shippers per 20-foot STD equivalent are expected to be higher at the west site due to greater difficulty in handling ships be- cause of the ocean currents present in the area and a higher cost of labor in this area of the country. All estimates are summarized below in $1 million, except annual revenue and life. Use spreadsheet analysis and a dis- count rate of 4% per year to determine ifer ther port should be constructed. It is not nec essary that the country build either port since one is already operating successfully 9.25 A country with rapid economic expansion has contracted for an economic evaluation PROBLEMS 337 of possibly building a new container port to augment the current port. The west coast site has deeper water so the dredging cost is lower than that for the east coast site. Also, the redredging of the west site will be re- quired only every 6 years while the east site must be reworked each 4 years. Redredging, which is expected to increase in cost by 10% each time will not take place in the last year of a port's commercial life. Disbenefitesti mates vary from west(fishing revenue loss) to ease (fishing and resort revenue losses). Fees to shippers per 20-TOESTDequivalent are expected to be higher at the west site due to greater difficulty in handling ships be cause of the ocean currents present in the area and a higher cost of labor in this area of the country. All estimates are summarized below in S1 million, except annual revenue and life. Use spreadsheet analysis and a dis- count rate of 4% per year to determine ifci ther port should be constructed. It is not nec essary that the country build either port since one is already operating successfully West Coast Site East Coast Site 21 5 12 initials Year Year 1 Dredging.com S. year Annual MRO year Kerurting dredio 1.5 OS 2 cacho years with increise of 10 bin 12 each 4 years with increase arch 2 million yeur $2.50 each Annual distenelits S/year Annual Tees number of 20-fo SI Sooner Ce life. munet a $2 each 20 12 of possibly building a new container port to augment the current port. The west coast site has deeper water so the dredging cost is lower than that for the east coast site. Also, the redredging of the west site will be re- quired only every 6 years while the east site must be reworked each 4 years. Redredging, which is expected to increase in cost by 10% each time, will not take place in the last year of a port's commercial life. Disbenefit esti- mates vary from west (fishing revenue loss) to east (fishing and resort revenue losses). Fees to shippers per 20-foot STD equivalent are expected to be higher at the west site due to greater difficulty in handling ships be- cause of the ocean currents present in the area and a higher cost of labor in this area of the country. All estimates are summarized below in $1 million, except annual revenue and life. Use spreadsheet analysis and a dis- count rate of 4% per year to determine ifer ther port should be constructed. It is not nec essary that the country build either port since one is already operating successfully