From the following data for a PPP project, calculate the (a) conventional, and (b) modified benefit/ cost ratios using an interest rate of 6% per year and an infinite project period.
 FIGURE 1.png)
Determine annual worth values
B = 100,000(0.06) + 100,000
= 6000 + 100,000
= $106,000
D = $60,000
C = 1,800,000(0.06) + 200,000(A/F,6%,3)
= 108,000 + 200,000(0.31411)
= $170,822
S = 90,000
(a) Conventional B/C ratio
B/C = (106,000 – 60,000)/(170,822 – 90,000)
= 0.57
(b) Modified B/C ratio = (B – D + S)/C
= (106,000 – 60,000 + 90,000)/170,822
= 0.80
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