Locations under consideration for a border patrol station have their costs estimated by the federal government. Use the B/C ratio method at an interest rate of 6% per year to determine which location to select, if any.
 FIGURE 1.png)
CN = 1,100,000(0.06) + 480,000
= $546,000
CS = 2,900,000(0.06) + 390,000
= $564,000
South (S) has the larger total cost
?B are the difference in disbenefits; S has lower disbenefits
?B = 70,000 – 40,000 = $30,000
?B/C = 30,000/(564,000 – 546,000)
= 30,000/18,000
= 1.67
Select location S
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