1. An investment opportunity has an initial cost of $1.8M and a uniform annual benefit of $400,000 over 6 years. Using a MARR of 10%, what is the benefit-cost ratio of this opportunity? Would you recommend it be pursued? Why or why not?

Essentials of Economics (MindTap Course List)
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Chapter19: The Basic Tools Of Finance
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Engineering Econ HW7 Q1

1. An investment opportunity has an initial cost of $1.8M and a uniform annual benefit of
$400,000 over 6 years. Using a MARR of 10%, what is the benefit-cost ratio of this
opportunity? Would you recommend it be pursued? Why or why not?
Transcribed Image Text:1. An investment opportunity has an initial cost of $1.8M and a uniform annual benefit of $400,000 over 6 years. Using a MARR of 10%, what is the benefit-cost ratio of this opportunity? Would you recommend it be pursued? Why or why not?
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