A flood control project will have a first cost of $1079296 with an annual maintenance cost of $41242 and a 10-year life. Reduced flood damage is expected to amount to $190803 per year. Lost income to farmers is estimated to be $21669 per year. At an interest rate of 6% per year, calculate the conventional Benefit/Cost ratio which will will show us if the project should be undertaken.

A flood control project will have a first cost of $1079296 with an annual maintenance cost of $41242 and a 10-year life. Reduced flood damage is expected to amount to $190803 per year. Lost income to farmers is estimated to be $21669 per year. At an interest rate of 6% per year, calculate the conventional Benefit/Cost ratio which will will show us if the project should be undertaken.

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 10E

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