Evaluating Projects with B/C Ratio Method Due Date: 5 pm, Nov. 18 Find a public
ID: 2766103 • Letter: E
Question
Evaluating Projects with B/C Ratio Method Due Date: 5 pm, Nov. 18 Find a public project in the news paper or Google search, and list its benefits, costs, and disbeneflts. This must be done to a meaningful level of discussion to be awarded full credit. So, be thorough: cite a source, discuss the project, list sources of costs (if not specific $ costs), list sourced of benefits, and list some "disbeneflts" that must be monetized in order to modal tha B/C ratio. Offer a few methods for how you would monetize tha benefits and disbeneflts.Explanation / Answer
A feasibility study was carried out to see what the costs and consequences would be of building the Wind powered electrical generating plant. Basic data on anticipated costs and benefits are provided in Table A and B respectively.
The Costs are given in the below table
Year ->
1
2
3
4
5
6
7
8
9
10
Initial capital costs
300
600
500
Cost of operations
40
42
50
46
52
61
59
Anticipated maintenance
25
42
35
41
27
29
31
Other costs
80
80
65
40
44
24
15
16
19
18
TOTAL
380
680
565
105
128
109
102
95
109
108
The benefits are given in the below table:
Now we we have to find the total benefit by Costs, we neeed to add all the costs
The sum of all the total costs = $2381
The sum of all the benefits = $3897
Hence the benefit by costs = B/C ratio = 3897/2381 = 1.636
Since the B/C ratio is greater than 1, it means the benefits are higher than the costs and the project is feasible in terms of benefit to cost ratio
Year ->
1
2
3
4
5
6
7
8
9
10
Initial capital costs
300
600
500
Cost of operations
40
42
50
46
52
61
59
Anticipated maintenance
25
42
35
41
27
29
31
Other costs
80
80
65
40
44
24
15
16
19
18
TOTAL
380
680
565
105
128
109
102
95
109
108
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