A city municipality is considering building a new recreational project that will generate $700,000 in benefits per year. Assume that that the project will cost $5 million to build and that 2% of this amount is classifed as a yearly added benefits resulting from this project. Calculate the B-C ratio for this project using the B-C ratio method and assuming that the cost is reduced by the amount of the added benefits. Assume a 12-year study period and that the company's MARR is 7%. A 1.2423 B 1.322 C 1.1701 D 1.1044

A city municipality is considering building a new recreational project that will generate $700,000 in benefits per year. Assume that that the project will cost $5 million to build and that 2% of this amount is classifed as a yearly added benefits resulting from this project. Calculate the B-C ratio for this project using the B-C ratio method and assuming that the cost is reduced by the amount of the added benefits. Assume a 12-year study period and that the company's MARR is 7%. A 1.2423 B 1.322 C 1.1701 D 1.1044

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 2.4CE

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