The following estimates (in $1000 units) have been developed for a security system upgrade at Fairbanks International Airport, FAlI. Item Cash Flow First cost, $ 13,000 AW of benefits, $ per year 3,800 FW of disbenefits, year 20, $ M&O costs, $ per year 6,750 400 Life, years 20 ..... Please calculate your dollar values to the nearest whole dollar. Format 0000 No commas. Please calculate your B/C ratios to 2 decimal places. Format 0.00 Treat any disbenefits as negative benefits and not additional costs. a. Calculate the modified B/C ratio (use AW) at a discount rate 10% APR, compounded daily. b. Is the project justified? O A. No, the B/C ratio is > 1 O B. Yes, the B/C ratio > 1 Please calculate your dollar values to the nearest whole dollar. Format 0000 No commas. c. Determine the minimum/maximum first cost, FC, that is possible to render the project economically unjustified/justified. S

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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The following estimates (in $1000 units) have been developed for a security system upgrade at Fairbanks International Airport, FAI.
Item
Cash Flow
First cost, $
13,000
AW of benefits, $ per year
3,800
FW of disbenefits, year 20, $
6,750
M&O costs, $ per year
400
Life, years
20
Please calculate your dollar values to the nearest whole dollar. Format 0000 No commas.
Please calculate your B/C ratios to 2 decimal places. Format 0.00
Treat any disbenefits as negative benefits and not additional costs.
a. Calculate the modified B/C ratio (use AW) at a discount rate of 10% APR, compounded daily.
b. Is the project justified?
O A. No, the B/C ratio is > 1
O B. Yes, the B/C ratio > 1
Please calculate your dollar values to the nearest whole dollar. Format 0000 No commas.
c. Determine the minimum/maximum first cost, FC, that is possible to render the project economically unjustified/justified. $
Transcribed Image Text:The following estimates (in $1000 units) have been developed for a security system upgrade at Fairbanks International Airport, FAI. Item Cash Flow First cost, $ 13,000 AW of benefits, $ per year 3,800 FW of disbenefits, year 20, $ 6,750 M&O costs, $ per year 400 Life, years 20 Please calculate your dollar values to the nearest whole dollar. Format 0000 No commas. Please calculate your B/C ratios to 2 decimal places. Format 0.00 Treat any disbenefits as negative benefits and not additional costs. a. Calculate the modified B/C ratio (use AW) at a discount rate of 10% APR, compounded daily. b. Is the project justified? O A. No, the B/C ratio is > 1 O B. Yes, the B/C ratio > 1 Please calculate your dollar values to the nearest whole dollar. Format 0000 No commas. c. Determine the minimum/maximum first cost, FC, that is possible to render the project economically unjustified/justified. $
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