The City Engineering Department of a city submitted a proposal for improving the downtown area. They propose banning vehicular traffic on the main street and turning this street into a pedestrian mall with tree plantings and other beautification features. This proposal will involve actual costs of Php 401,600,000 and, according to its proponents, the proposal will produce benefits to the town as follows: Benefits: Increased sales tax revenue: Php 27,800,000 per year Increased real estate property taxes: Php 14,350,000 per year Benefits due to decreased air pollution: Php 5,100,000 per year Quality of life improvements to users: Php 4,300,000 per year Dtermine the following: a. Compute the B–C ratio of this plan based on a MARR of 10% per year and an infinite life for the project using AW. b. Given a disbenefit of Php 10,300,000 per year due to increased maintenance, compute for the B-C ratio given the same conditions in item a. c. How does the B–C ratio change for a 20-year project life? Compute using the same benefits and disbenefits.
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The City Engineering Department of a city submitted a proposal for improving the downtown area. They propose banning vehicular traffic on the main street and turning this street into a pedestrian mall with tree plantings and other beautification features. This proposal will involve actual costs of Php 401,600,000 and, according to its proponents, the proposal will produce benefits to the town as follows:
Benefits:
Increased sales tax revenue: Php 27,800,000 per year
Increased real estate property taxes: Php 14,350,000 per year
Benefits due to decreased air pollution: Php 5,100,000 per year
Quality of life improvements to users: Php 4,300,000 per year
Dtermine the following:
a. Compute the B–C ratio of this plan based on a MARR of 10% per year and an infinite life for the project using AW.
b. Given a disbenefit of Php 10,300,000 per year due to increased maintenance, compute for the B-C ratio given the same conditions in item a.
c. How does the B–C ratio change for a 20-year project life? Compute using the same benefits and disbenefits.
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