Managerial Economics Week 12 Individual Work - Assignment Example

Incorporating secondary and intangible benefits and costs is an important analytical tool that can help project managers to account for the value added that arises from outside the project. The employment assumption in Detroit area regarding the benefits of the project is that the project will create more job opportunities for people. There is a positive relationship between employment rates in the region and the redevelopment project. There will increased income for resident of the area due to the project Without incorporating benefits in calculating the Benefit-cost ratio, the BCR equals discounted incremental costs.

The project would be very costly to implement hence would not be desirable to conduct. The assumption is that the facility will lead to increased revenues from hotels and other conventional facilities. The assumption is realistic since the hotels would accommodate customers. Good customer services and accommodation are some of the core areas of the hotel facility that will generate revenues in addition to creating employment opportunities for people. Hotels generate Revenue from room rentals, food and beverage sales.

Improving customer services, adding new revenue source and branding the hotel are some of the strategies that allow hotels to generate high levels of revenues (Rosehill, 2014). The desirability of the project slightly decreases even though the BCR value is less than 1. Reducing benefits from hotel facilities and excluding employment benefits makes the project less desirable for