Use the estimates from Problem 9.39 (repeated below) to answer the questions asked concerning the extraction of rare metals in a National Wildlife Preserve. Utilize the B/C method, a 5-year study period, and a discount rate of 10% per year. The monetary unit is $ million. Use a spreadsheet.



Problem 9.39



The Department of Defense is considering three sites in the National Wildlife Preserve for extrac­tion of rare metals. The cash flows associated with each site are summarized. The extraction period is limited to 5 years and the interest rate is 10% per year. Use the B/C method to determine which site, if any, is acceptable. The monetary unit is $ million.


(a) Site A is selected (Screen image #1)

(b) Screen image #2. Work backwards in a new B vs. A comparison to obtain ?B/C = 1.01 (cell C16). This requires ?B = 33.17, which in turn requires B = 33.17 for site B. Perform C vs. B comparison to eliminate C, thus leaving only site B.

(c) Site C is acceptable (marginally) at B/C = 1.00

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