A site on a major river is being evaluated for a new lock and clam for navigation purposes. Two options are considered: (a) single 1200-foot lock or (b) single 1200 foot lock and a single 600-foot lock (two locks, side by side). Benefits and costs of the two options are indicated in the table. Interest rate lo be used is 7%, and (he planning period is 50 years.
| Single Lock ($ million) | Double Locks ($ million) |
Initial cost | 60.0 | 85.0 |
Annual operating cost | 1.0 | 1.5 |
Annual benefit | 12.0 | 16.0 |
(a) Show the cash flow table, using the correct sign convention for all entries including the incremental column.
(b) Solve by the present worth method.
(c) Solve by the annual cash flow method.
(d) Solve by the incremental benefit-cost ratio method, assuming that each alternative has a B-C ratio greater than 1.0.
(e) Solve by the incremental rate of return method, assuming that each alternative has a satisfactory internal rate of return. Use the shortcut of checking at the MARR only
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.