Question 8.P.10: In Example 8.7, assume that the affected farmers are lobbyin......

Schaum’s Outline of Engineering Economics [1215911]

In Example 8.7, assume that the affected farmers are lobbying for relocation payments and subsidies to compensate them for the lost farmland. Estimates of “equitable” payments vary widely, but one number being considered is an annual payment of $3.25 million per year to the farmers over the 30-year period. Would the project still be desirable, with this new disbenefit?

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BCR  =  \frac{\$60.0  –  \$3.25}{\$24.1}  =  2.35

Since BCR > 1, the project is still desirable.

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