The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour of the grounds and animals, suitable for both routine enjoyment and educational purposes in classrooms. Survey data indicate that this will have either a neutral or positive effect upon actual zoo attendance. The Web site will be professionally done and have an initial cost of $325,000. Upkeep, refreshing the videos, and developing videos for scientific research and entertainment will cost another $80,000 per year. The zoo is expected to be in operation for an indefinite period; however, a study period of only 10 years for the Web site is to be assumed, with only a residual (salvage) value of $60,000 for the archival value being anticipated. Interest is 7%. An estimated 100,000 persons will visit the e-zoo in the first year, increasing by 30,000 each year, and they will receive, on the average, an additional $0.80 of benefit per visit when the new area is complete. On the basis of benefit-cost analysis, should the Web site be supported for funding? (A) Yes B No
The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour of the grounds and animals, suitable for both routine enjoyment and educational purposes in classrooms. Survey data indicate that this will have either a neutral or positive effect upon actual zoo attendance. The Web site will be professionally done and have an initial cost of $325,000. Upkeep, refreshing the videos, and developing videos for scientific research and entertainment will cost another $80,000 per year. The zoo is expected to be in operation for an indefinite period; however, a study period of only 10 years for the Web site is to be assumed, with only a residual (salvage) value of $60,000 for the archival value being anticipated. Interest is 7%. An estimated 100,000 persons will visit the e-zoo in the first year, increasing by 30,000 each year, and they will receive, on the average, an additional $0.80 of benefit per visit when the new area is complete. On the basis of benefit-cost analysis, should the Web site be supported for funding? (A) Yes B No
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour of the grounds and animals,
suitable for both routine enjoyment and educational purposes in classrooms. Survey data indicate that this will have either a neutral
or positive effect upon actual zoo attendance. The Web site will be professionally done and have an initial cost of $325,000. Upkeep,
refreshing the videos, and developing videos for scientific research and entertainment will cost another $80,000 per year. The zoo is
expected to be in operation for an indefinite period; however, a study period of only 10 years for the Web site is to be assumed,
with only a residual (salvage) value of $60,000 for the archival value being anticipated. Interest is 7%. An estimated 100,000 persons
will visit the e-zoo in the first year, increasing by 30,000 each year, and they will receive, on the average, an additional $0.80 of
benefit per visit when the new area is complete. On the basis of benefit-cost analysis, should the Web site be supported for
funding?
A) Yes
(B) No](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F094e75a1-963b-4638-8aa4-cd822ba13db8%2F1106e88f-764d-429c-ba30-0459df796c36%2F1yo7df_processed.png&w=3840&q=75)
Transcribed Image Text:The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour of the grounds and animals,
suitable for both routine enjoyment and educational purposes in classrooms. Survey data indicate that this will have either a neutral
or positive effect upon actual zoo attendance. The Web site will be professionally done and have an initial cost of $325,000. Upkeep,
refreshing the videos, and developing videos for scientific research and entertainment will cost another $80,000 per year. The zoo is
expected to be in operation for an indefinite period; however, a study period of only 10 years for the Web site is to be assumed,
with only a residual (salvage) value of $60,000 for the archival value being anticipated. Interest is 7%. An estimated 100,000 persons
will visit the e-zoo in the first year, increasing by 30,000 each year, and they will receive, on the average, an additional $0.80 of
benefit per visit when the new area is complete. On the basis of benefit-cost analysis, should the Web site be supported for
funding?
A) Yes
(B) No
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