Duck Construction Has Proposed Two Alternatives for Constructing a New

question 9

Essay

Duck Construction has proposed two alternatives for constructing a new bridge in Oregon. Based on data from recent bridge construction projects of comparable size, the estimated costs for each alternative are given below. Use the conventional B- C ratio method, with PW as the equivalent- worth measure, to determine which alternative should be selected at an interest rate of 9% per year. Assume a study period of 35 years. $$\begin{array} { | l | l | l | } \hline & \text { Alternative I } & \text { Alternative II } \\\hline \text { Construction and design costs, } \$ \mathrm { M } & \$ 1,400,000 & \$ 1,410,000 \\\hline \text { Annual maintenance, } \$ / \mathrm { yr } & \$ 170,000 & \$ 190,500 \\\hline \text { Annual benefits, } \$ / \mathrm { yr } & \$ 690,000 & \$ 712,500 \\\hline\end{array}$$

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Definitions:

Affective Commitment

An employee’s emotional attachment to, identification with, and involvement in the organization.

Continuance Commitment

The level of commitment an employee feels towards their organization based on the costs they perceive in leaving it.

Affective Commitment

The emotional attachment an employee feels towards their organization, which significantly influences their willingness to contribute to the organization's goals.

Socialization Practices

Methods and processes used to integrate newcomers into an organizational culture and acquaint them with their new roles.