7.15 A project to extend canals for vegetable crop irri- gation into an area that was recently cleared of Mesquite trees (a nuisance tree in Texas) and large weeds is projected to have a capital cost of $2,000,000. Annual maintenance and operation costs will be $100,000 per year. Annual favorable consequences to the general public of $820,000 per year will be offset to some extent by annual adverse consequences of $400,000 to a portion of the general public. If the project is assumed to have a 20-year life, what is the conventional B/C ratio at an interest rate of 8% per year? ? 7
7.15 A project to extend canals for vegetable crop irri- gation into an area that was recently cleared of Mesquite trees (a nuisance tree in Texas) and large weeds is projected to have a capital cost of $2,000,000. Annual maintenance and operation costs will be $100,000 per year. Annual favorable consequences to the general public of $820,000 per year will be offset to some extent by annual adverse consequences of $400,000 to a portion of the general public. If the project is assumed to have a 20-year life, what is the conventional B/C ratio at an interest rate of 8% per year? ? 7
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 15P
Question
use excel
![7.15 A project to extend canals for vegetable crop irri-
gation into an area that was recently cleared of
Mesquite trees (a nuisance tree in Texas) and large
weeds is projected to have a capital cost of
$2,000,000. Annual maintenance and operation
costs will be $100,000 per year. Annual favorable
consequences to the general public of $820,000
per year will be offset to some extent by annual
adverse consequences of $400,000 to a portion of
the general public. If the project is assumed to
have a 20-year life, what is the conventional B/C
ratio at an interest rate of 8% per year?
?
7](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F58a386a0-ae96-45f8-b389-fb38c4a62a15%2Fef253e2c-6820-464c-a9ab-ede960e70c94%2Frycgfro_processed.png&w=3840&q=75)
Transcribed Image Text:7.15 A project to extend canals for vegetable crop irri-
gation into an area that was recently cleared of
Mesquite trees (a nuisance tree in Texas) and large
weeds is projected to have a capital cost of
$2,000,000. Annual maintenance and operation
costs will be $100,000 per year. Annual favorable
consequences to the general public of $820,000
per year will be offset to some extent by annual
adverse consequences of $400,000 to a portion of
the general public. If the project is assumed to
have a 20-year life, what is the conventional B/C
ratio at an interest rate of 8% per year?
?
7
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