(Ch8) Two plans have been proposed for a high-speed passenger rail line between Knoxville and Memphis. The plans are summarized in the table below....

(Ch8) Two plans have been proposed for a high-speed passenger rail line between

Knoxville and Memphis. The plans are summarized in the table below. Costs and benefits

are in millions of dollars. Use benefit-cost ratio analysis with an interest rate of 10% to

determine which, if either, of the plans should be accepted. (3 pts.)

Plan A / Plan B

Econ. life (Years) 40 / 20

Salvage value $15 / $12

Annual benefits 25 / 22

Annual M & O cost 5 / 3

Initial cost 300 / 160

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