8s.1 A city is trying to decide whether to build a parking garage. An engineering plan calculates that it takes a year to build at a cost of $2 million and $200,000 per year to operate. An in-depth analysis of operating revenue determines that the garage will start to earn revenues of $500,000 per year in the second year. The city is interested in knowing whether this project will be profitable (BC > 1) over the next eight years (counting the year of construction) at 10%. The project's B/C ratio over the eight-year period is closest to а. 0.77 b. 0.87 с. 1.33 d. 2.50
8s.1 A city is trying to decide whether to build a parking garage. An engineering plan calculates that it takes a year to build at a cost of $2 million and $200,000 per year to operate. An in-depth analysis of operating revenue determines that the garage will start to earn revenues of $500,000 per year in the second year. The city is interested in knowing whether this project will be profitable (BC > 1) over the next eight years (counting the year of construction) at 10%. The project's B/C ratio over the eight-year period is closest to а. 0.77 b. 0.87 с. 1.33 d. 2.50
Chapter1: Making Economics Decisions
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![8s.1 A city is trying to decide whether to build a parking garage. An engineering plan calculates that it takes a year to build at a cost of $2 million
and $200,000 per year to operate. An in-depth analysis of operating revenue determines that the garage will start to earn revenues of $500,000
per year in the second year. The city is interested in knowing whether this project will be profitable (BC > 1) over the next eight years (counting the
year of construction) at 10%. The project's B/C ratio over the eight-year period is closest to
a. 0.77
b. 0.87
c. 1.33
d. 2.50](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0309cbb4-3056-403b-8eb0-8f64136b6051%2F485ac7d6-9016-4f7a-b044-eceb344aba76%2Fux2qkvf_processed.png&w=3840&q=75)
Transcribed Image Text:8s.1 A city is trying to decide whether to build a parking garage. An engineering plan calculates that it takes a year to build at a cost of $2 million
and $200,000 per year to operate. An in-depth analysis of operating revenue determines that the garage will start to earn revenues of $500,000
per year in the second year. The city is interested in knowing whether this project will be profitable (BC > 1) over the next eight years (counting the
year of construction) at 10%. The project's B/C ratio over the eight-year period is closest to
a. 0.77
b. 0.87
c. 1.33
d. 2.50
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