Q478. This is one of a series of problems (469, 470, 471, 472, 473, 474, 475, 476, 477) relating to the same fictional case: The community of Ourville which is considering some options for creating parks to enhance the quality of life of local residents. The amounts are expressed in simple numbers – e.g., $100 – which you can assume to be referring to realistic amounts – e.g., hundreds of thousands.

In comparing options for the park projects in Ourville, staff have noted that equipment choices will have an impact on maintenance costs down the line. Two swing sets, in particular, are being considered. One is very expensive up front, but has a very favorable maintenance outlook. The other is less expensive, but might need repairs and even to be replaced during the expected lifetime of the sturdier set. Data is below (based on a 7% discount rate). We assume annual community benefits from using the park to be 2000 (except in the year where the cheaper swing set would have to be replaced). The town budget could afford either project, but not both. What do you recommend and why? Explain to a public audience what is going on here.



Add a New Comment