Q1

A county will invest $5,600,000 to clean up a chemical spill that occurred following a natural disaster. At the end of the 12-year planning horizo
$1,200,000 will be spent in restoring the site to an environmentally acceptable condition. The investment is expected to produce net annual be
decrease by 26% each year. The net annual public benefit in the 1st year is estimated to be $2,500,000. Determine the B/C ratio for the investm
MARR.

INVESTMENT $ 5,500,000.00
n 10
Additional $ 1,200,000.00
g 25% each year
A $ 2,600,000.00 1st year
i 8%
PW OF BENEFITS 2.95
7673277.16

PW OF COSTS 6055832.19
0.46
1.267

Q2

Invested $ 1,748,000.00
Annual Amount $ 400,000.00
Rate 19%

NPER (DPBP) 10.20 years

11 years
Q3

initial installation $ 35,000,000.00

n after 1st year 10 years
minor R&R $ 12,000,000.00
n after 2nd years 20 years
major R&R $ 20,000,000.00
O&M $ 2,000,000.00
rate 3%

$ 69,000,000.00 $ 51,740,748.98
Capitalized cost $ 120,740,749

Q4

Q5
Q6

$ 295,000.00
$ 24,000.00
$ 3.70
10
10%
PMT $ 48,009.89
Annual Sales Vol 6489

Q7
 Drill Press T Drill Press M
Initial Investment $ 20,000.00 $ 30,000.00
Estimated Life 10 10 MARR 10%
Estimated Salv. $ 5,000.00 $ 7,000.00
Annual O… Cost $ 12,000.00 $ 6,000.00
Annual M… Cost $ 2,000.00 $ 4,000.00

ANS
Future Worth Drill -269,999.00
Future Worth Drill -230,187.00

$318,748.49

$ (269,999) $ (230,187)

select: DRILL M

Q8
Annual worth 3
Discounted 5
Capitalized 7
External rate of 6
Future worth 1
Internal rate of 4
Present worth 2
12-year planning horizon, an additional
produce net annual benefits that will
B/C ratio for the investment using a 4%