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Unformatted text preview: $250,000 $350,000 $500,000 Irrigation benefits $350,000 $450,000 $600,000 Recreation benefits $100,000 $200,000 $350,000 O&M costs $200,000 $250,000 $350,000 The interest rate is 10%, and the life of each project is estimated to be 50 years. a) Find the benefit-cost ratio for each alternative. b) Select the best alternative, according to the incremental BC(i). 12.9 The government is considering undertaking one out of the four projects A1, A2, A3 and A4. These projects are mutually exclusive, and the estimated present worths of their costs and of their benefits are shown in millions of dollars as follows: Projects PW benefits PW costs A1 $40 $85 A2 $150 $110 A3 $70 $25 A4 $120 $73 All of the projects have the same duration. Assuming that there is no do-nothing alternative, which alternative would you select? Justify your choice by using a benefit-cost ratio on the incremental investment, BC(i)....
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- Spring '12