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5. Assume the seven projects were not mutually exclusive and you were faced with a budget constraint that allowed you to pick only two. Which two projects would appear at the top of your preferred list? Why?

5 5 + - E New tab → 0 Career: D O Course R HW 1 X Syllabus GOECD ILI GOECD iLit Field Cha Online Bc C Three ML c Get Hom 0 file:///C:/Users/bwjon/AppData/Local/Packages/Microsoft. MicrosoftEdge_3wekyb3d8bbwe/Tempstate/Downloads/HW%201%20APEC%205950%20(3).pdf ☆ B ... Find on page Enter text to search No results > Options X 1 of 1 o - + O Fit to page Page view | A Read aloud Add notes Three mutually exclusive projects are being considered for a remote river valley: a recreation facility (R), a forest re- serve/recreation facility (F), and a wilderness area (W). The benefits and costs for each of these projects is listed in the table below. Benefits accrue over time and are discounted back to present value; all costs are incurred during the initial budgeting period. An additional project would build a road into the remote valley. The new road (NR) project may be considered on its own (regardless of whether Project R, F, or W are selected) or it may be considered in combination with any of these projects. Project BC Ratios Benefits (Million $) Costs (Million $) Net Benefits (Million $) R: A recreation facility F: A forest preserve with limited recreation facilities W: A wilderness area (limited access & facilities) NR: New Road Project R+NR F+NR W+NR Note: Additional Benefits for each project, if combined with the new road project W Type here to search 10:14 AM @ ^ ( 1) 111/2020 2

Answer 1

				B	C	A=B-C	D=B/C	E=A/C
				Benefit	Cost	Net Benefit	BC Ratio	Net Benefit/Cost
			R	10	8	2	1.25	0.25
			F	13	10	3	1.3	0.3
			W	2	1	1	2	1
			NR	2	4	-2	0.5	-0.5
		(10+2+8)	R+NR	20	12	8	1.666667	0.666666667
		(13+2+5)	F+NR	20	14	6	1.428571	0.428571429
		(2+2+1+1)	W+NR	5	5	0	1	0
		1	2
	Highest two Net Benefits	R+NR	F+NR
	Highest two BC Ratios	R+NR	F+NR
	Highest Net Benefit/Cost	R+NR	F+NR
	Two Projects to be selected:
	1. R+NR
	2. F+NR
	These two projects gives highest Net Benefit per dollar of cost