Purchase Solution

Economics: Benefit-cost ratio.

Not what you're looking for?

Ask Custom Question

The NJ Garden State Parkway is planning to add more lanes in their northern corridor. They need to decide between two alternatives MM and PP. MM requires an initial investment of $18 million and $300,000 in annual costs. PP requires an initial investment of $18 million and $ 400,000 in annual cost. The annual benefits from the project will be $3 million for MM and $4 million for PP. Assume an infinite life and discount rate of 8% per year.

a) Calculate the Modified BCR for MM.
b) Calculate the Modified BCR for PP.
c) Which alternative should NJGSP choose and why?

Purchase this Solution

Solution Summary

The problem deals with estimating the benefit-cost ratio from provided information.

Solution provided by:
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
Recent Feedback
  • "Thank you."
  • "thank you Chidi Ngene.. if you have any APA references would be great"
  • "Thank you so much for your help, your explanations were easy to understand and apply!"
  • "are you able to highlight the equations used either on the xlsx or a word doc as to how each graph was formed- overall looks fine i just need help understanding this myself"
  • "Chidi Ngene, M. Sc. Was extremely helpful as without the help and guidance I would have failed, but with the help I passed. I still have a lot to learn and in need of the guidance to understand and learn more on the subject. I would recommend Chidi Ngene and BrainMass to anyone that are in need of help. Thank you!!"
Purchase this Solution

Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.