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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Attached is question. PLEASE SHOW WORK IN EXCEL!

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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