Problem
A state-sponsored Forest Management Bureau is evaluating alternative routes for a new road into a formerly inaccessible region. Three mutually exclusive plans for routing the road provide different benefits, as indicated in Table P10-19. The roads are assumed to have an economic life of 50 years, and MARR is 8% per year. Which route should be selected according to the B-C ratio method?
TABLE P10-19 Mutually Exclusive Plans for Problem 10-19
Construction Annual Annual Savings Annual Recreational Annual Timber Route Costs Maintenance in Fire Damage Benefit Access Benefit
Cost
A $185,000 $2,000 $5,000 $3,000 $500
B 220,000 3,000 7,000 6,500 1,500
C 290,000 4,000 12,000 6,000 2,800
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.