Determine the conventional b/c ratio at an interest rate
1. A public water utility spent $12 million to build a treatment plant to remove certain heavy metals from well water. The plant’s operating cost is
$1.1 million per year. Public health benefits are expected to be $285,000 per year. What is the B/C daily flow rates are relatively low. If the operating cost is $600,000 per year, what would the initial investment cost of the GFH system have to be in order to get a B/C ratio of 1.0? Public health ben- efits are estimated at $800,000 per year. Assume the equipment life is 10 years and the interest rate is 6% per year.
2. The cash flows associated with a Bexar County Arroyo improvement project are as follows: initial cost $650,000; life 20 years; maintenance cost $150,000 per year; benefits $600,000 per year; disbenefits $190,000 per year. Determine the conventional B/C ratio at an interest rate of 6% per year.
