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Two Alternatives Have Been Proposed for a Government Project

question 2

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Two alternatives have been proposed for a government project. The estimated costs associated with each alternative are given below. Use the modified B- C ratio method, with AW as the equivalent- worth measure, to determine which alternative should be selected at an interest rate of 3% per year.
$Two alternatives have been proposed for a government project. The estimated costs associated with each alternative are given below. Use the modified B- C ratio method, with AW as the equivalent- worth measure, to determine which alternative should be selected at an interest rate of 3% per year. \begin{array} { | l | c | c | } \hline & \text { Alternative I } & \text { Alternative II } \\ \hline \text { Initial cost, } \$ & \$ 1,250,000 & \$ 1,050,000 \\ \hline \text { Annualmaintenance, } \$ / y r & \$ 180,000 & \$ 125,000 \\ \hline \text { Annual benefits, } \$ / y r & \$ 550,000 & \$ 540,000 \\ \hline \text { Salvage value, } \$ & \$ 11,000 & \$ 9800 \\ \hline \text { Projectlife, years } & 28 & 28 \\ \hline \end{array} \begin{array} { | l | c | c | } \hline & \text { Alternative I } & \text { Alternative II } \\ \hline \text { Iritialcogt, } \$ & \$ 1,250,000 & \$ 1,050,000 \\ \hline \text { Arrualmaintenance, } \$ / y r & \$ 180,000 & \$ 125,000 \\ \hline \text { Arrualberefitg, } \$ / y r & \$ 550,000 & \$ 540 ,000 \\ \hline \text { 5alvage value, } \$ & \$ 11,000 & \$ 9800 \\ \hline \text { Project life, yearg } & 28 & 28 \\ \hline \end{array} \begin{array}{|l|c|c|} \hline&\text { Alternative I}&\text { Alternative II}\\ \hline \text { itial cost, } \$ & \$ 1,250,000 &\$ 1,050,000\\ \hline \text { nnual maintenance, } \$ / y r & \$ 180,000 &\$ 125,000\\ \hline \text { nnual benefits, } \$ / y r & \$ 550,000&\$ 540,000 \\ \hline \text { lvage value, } \$ & \$ 11,000& \$ 9800 \\ \hline \text { oject life. vears } & 28& 28\\ \hline \end{array}$ $\begin{array} { | l | c | c | } \hline & \text { Alternative I } & \text { Alternative II } \\\hline \text { Initial cost, } \$ & \$ 1,250,000 & \$ 1,050,000 \\\hline \text { Annualmaintenance, } \$ / y r & \$ 180,000 & \$ 125,000 \\\hline \text { Annual benefits, } \$ / y r & \$ 550,000 & \$ 540,000 \\\hline \text { Salvage value, } \$ & \$ 11,000 & \$ 9800 \\\hline \text { Projectlife, years } & 28 & 28 \\\hline\end{array}$ $\begin{array} { | l | c | c | } \hline & \text { Alternative I } & \text { Alternative II } \\\hline \text { Iritialcogt, } \$ & \$ 1,250,000 & \$ 1,050,000 \\\hline \text { Arrualmaintenance, } \$ / y r & \$ 180,000 & \$ 125,000 \\\hline \text { Arrualberefitg, } \$ / y r & \$ 550,000 & \$ 540 ,000 \\\hline \text { 5alvage value, } \$ & \$ 11,000 & \$ 9800 \\\hline \text { Project life, yearg } & 28 & 28 \\\hline\end{array}$ $\begin{array}{|l|c|c|}\hline&\text { Alternative I}&\text { Alternative II}\\\hline \text { itial cost, } \$ & \$ 1,250,000 &\$ 1,050,000\\\hline \text { nnual maintenance, } \$ / y r & \$ 180,000 &\$ 125,000\\\hline \text { nnual benefits, } \$ / y r & \$ 550,000&\$ 540,000 \\\hline \text { lvage value, } \$ & \$ 11,000& \$ 9800 \\\hline \text { oject life. vears } & 28& 28\\\hline\end{array}$

Definitions:

Prototype

An example of a concept that closely matches the defining characteristics of the concept.

Vehicle

A means of transporting goods or individuals from one location to another, such as cars, bikes, and buses.

Glider

A type of aircraft that is designed to fly without the use of engines, relying on dynamic lift from air currents to stay aloft.

Fruit

The ripened ovary, along with its seeds, of a flowering plant, usually eaten as food.