8.9 If the benefit cost ratio is defined as (B-O)/K where B are the benefits, K the initial costs and O the ongoing costs, what is the benefit cost ratio in the case where initial costs are $20,000, ongoing costs $5,000 p.a. and benefits $10,000 p.a. for a discount rate of 6.8% p.a. and over a period of 20 years ? Assume all costs and benefits occur at the end of the year.

8.9 If the benefit cost ratio is defined as (B-O)/K where B are the benefits, K the initial costs and O the ongoing costs, what is the benefit cost ratio in the case where initial costs are $20,000, ongoing costs $5,000 p.a. and benefits $10,000 p.a. for a discount rate of 6.8% p.a. and over a period of 20 years ? Assume all costs and benefits occur at the end of the year.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8.9 If the benefit cost ratio is defined as (B-O)/K where B are the benefits, K the
initial costs and O the ongoing costs, what is the benefit cost ratio in the case where
initial costs are $20,000, ongoing costs $5,000 p.a. and benefits $10,000 p.a. for a
discount rate of 6.8% p.a. and over a period of 20 years ? Assume all costs and
benefits occur at the end of the year.

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