Reference no: EM131374548
Consider the bridge project of given Problem. We assumed there would be no toll for crossing. Now suppose the province is considering a toll of S7 per round trip over the bridge. Thev estimate that, if the toll is charged, the number of park visits will rise to only 10 600 per year instead of 11 000.
(a) Compute the present worth of the project if the toll is charged.
(b) Why is the present worth of the project reduced by the toll?
Problem :
A province in Canada is considering the construction of a bridge. The bridge would cross a narrow part of a lake near a provincial park. The major benefit of the bridge would be reduced travel time to a campsite from a nearby urban centre. This lowers the cost of camping trips at the park. As well, an increase in the number of visits resulting from the lower cost per visit is expected.
Data concerning the number of week-Ions; visits and their costs are shown below:
|
Number of visits and Average Cost per Visit to Park
|
Inputs
|
Without Bridge
|
With Bridge
|
Travel Cost
|
140
|
87.5
|
Use of equipment
|
50
|
50
|
Food
|
100
|
100
|
Total
|
290
|
237.5
|
Number of visits
|
8000
|
11000
|
The following data are available as well:
1. The bridge will take one year to build.
2. The bridge will have a 25-vear life once it is completed. This means that the time horizon for computations is 26 years.
3. Construction cost for the bridge is S3 750 000. Assume that this cost is incurred at the beginning of year 1.
4. Annual operating and maintenance costs for the bridge are given by S7500 + 0.25,/ where $7500 is the fixed operating and maintenance cost per year and q is the number of crossings.
5. Operating and maintenance costs are incurred at the end of each year over which the bridge is in operation. This is at the ends of years 2, 3, . . . , 26.
6. TheMARRis 10%. (Notice that the annual benefits for this project were computed as part of the discussion of Example 10.1.)
(a) Compute the present worth of the project.
(b) Compute the benefit-cost ratio.
(c) Compute the modified benefit-cost ratio.
What is the concentration in molecules
: A compressed cylinder of 100% CO at a pressure of 100 atm. Treating it as an ideal gas, a. What is the concentration in molecules/cm3 inside the cylinder?
|
Develop your personal philosophy for a career
: Synthesize knowledge from values theory, ethics and legal regulatory statutes, and develop your personal philosophy for a career as an advanced practice nurse. This is a graduate level nursing course. The subject relates to Nursing
|
Heat of vaporization for water
: How much heat (in kJ) is required to warm 13.0 g of ice, initially at -10.0 °C, to steam at 111.0 °C? The heat capacity of ice is 2.09 J/g⋅°C and that of steam is 2.01 J/g⋅°C, the heat of fusion for water is 6.02 kJ/mol, and the heat of vaporizati..
|
What is the background or scene of the magazine cover
: Gender role socialization starts with a baby wrapped in pink or blue and continues to permeate every stage of our lives from there. Messages about what it means to be a girl or a boy are everywhere. We are told over and over, and in a million su..
|
Compute present worth of the project if the toll is charged
: Compute the present worth of the project if the toll is charged.- Why is the present worth of the project reduced by the toll?
|
Corn or cellulosic ethanol
: Here is my question: Why will we never be able to replace the gasoline we currently use to power our vehicles in the U.S. by either ethanol made from corn or cellulosic ethanol?
|
How many liters of methane gas
: How many liters of methane gas (CH4) need to be combusted to produce 8.5 liters of water vapor, if all measurements are taken at the same temperature and pressure? Show all of the work used to solve this problem. CH4 (g)+ 2 O2 (g) ______CO2 (g)+ 2..
|
What are the most important threats to cybersecurity
: What are the most important threats to cybersecurity? What is the basis of your opinion? Explain
|
What images of women does this program portray
: Television is a powerful agent of socialization. It is everywhere, and we devour thousands of hours of it - so it seems important to ask what kinds of messages we are getting about ourselves and our society from all that viewing. How does TV soc..
|