7.16 The cash flows associated with a public works project in Buffalo, New York, are shown. Use the modified B/C ratio at a discount rate of 5% per year to determine the economic justification. First cost, $ 50,000,000 AW of benefits, $/year 7,500,000 AW of disbenefits, $/year 1,700,000 M&O costs, $/year 900,000 30 Life of project, years

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 16EA: Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in...
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7.16 The cash flows associated with a public works
project in Buffalo, New York, are shown. Use the
modified B/C ratio at a discount rate of 5% per
year to determine the economic justification.
First cost, $
50,000,000
AW of benefits, $/year
7,500,000
AW of disbenefits, $/year
1,700,000
M&O costs, $/year
900,000
30
Life of project, years
Transcribed Image Text:7.16 The cash flows associated with a public works project in Buffalo, New York, are shown. Use the modified B/C ratio at a discount rate of 5% per year to determine the economic justification. First cost, $ 50,000,000 AW of benefits, $/year 7,500,000 AW of disbenefits, $/year 1,700,000 M&O costs, $/year 900,000 30 Life of project, years
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