Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:2. Complete the following table evaluating whether or not to protect a coral roef area. There is space
for supporting work below and on the next page. You do NOT need to show the work for repeated
calculations (e.g. step by step NPV for every year). Each cell to the right of NPV is the NPV for a
single year.
Year
0.
2
3
4
6.
8.
6.
10
Costs (in thousands)
Construction
1250
Recurring costs
Foregone recreation
Benefits
130
20
130
130
130
130
130
130
130
130
130
20
20
20
20
20
20
20
20
20
20
300 300
300
Increased tourist revenue
Net
NPV 0 5%
NPV 0 10%
300
300
300
300 300
300
300
300
NPV of Stream of Benefits 0 5%:
NPV of Stream of Benefits 10%:
Supporting work:
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