solve without using tables excel or any programs A flood con

solve without using tables, excel or any programs

A flood control project with a life of 16 years will require an investment of $54749 and annual maintenance costs of $5,000. The project will provide no benefits for the first two years but will save $24,000 per year in flood damage starting in the third year. The appropriate MARR is 12% per year. Using the PW, what is the modified B-C ratio for the flood control project? rrect 1.6800

Solution

Year Cash flows PVIF@12% Discounted cash flows A B A×B 0 $      (54,749)         1.0000 $                  -54,749.00 1 $        (5,000)         0.8929 $                    -4,464.50 2 $        (5,000)         0.7972 $                    -3,986.00 3 $        19,000         0.7118 $                    13,524.20 4 $        19,000         0.6355 $                    12,074.50 5 $        19,000         0.5674 $                    10,780.60 6 $        19,000         0.5066 $                      9,625.40 7 $        19,000         0.4523 $                      8,593.70 8 $        19,000         0.4039 $                      7,674.10 9 $        19,000         0.3606 $                      6,851.40 10 $        19,000         0.3220 $                      6,118.00 11 $        19,000         0.2875 $                      5,462.50 12 $        19,000         0.2567 $                      4,877.30 13 $        19,000         0.2292 $                      4,354.80 14 $        19,000         0.2046 $                      3,887.40 15 $        19,000         0.1827 $                      3,471.30 16 $        19,000         0.1631 $                      3,098.90 PW $                    37,194.60 B-C Ratio                                 1.68 =1+37194.6/54749