Problem 1: A city that operates automobile parking facilities is evaluating a proposal to erect...
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Problem 1: A city that operates automobile parking facilities is evaluating a proposal to erect and operate a structure for parking in its downtown area. Three designs for a facility to be built on available sites have been identified as follows, where all dollar figures are in thousands: ! Cost of site Cost of building Annual fee collection Annual maintenance cost Service life Desigo A Design By Design C $240 $180 $200 $2,200 $700 $1,400 $830 $750 $600 $410 $360 $310 30 years 30 years 30 years At the end of the estimated service life, the selected facility would be torn down and the land would be sold. It is estimated that the proceeds from the resale of the land will be equal to the cost of clearing the site. If the city's interest rate is known to be 10%, which design alternative would be selected on the basis of the benefit-cost criterion
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