A city council is considering converting an old industrial lot into a public recreation center. They estimate the benefit to the community to be worth $2,000,000. Contractors have estimated a net cost to build the recreation center and to refurbish the property to be $3,100,000. Should they proceed with the project? A. 0.65 and Yes B. 0.65 and No C. 1.55 and Yes D. 1.55 and No. MCQ

A city council is considering converting an old industrial lot into a public recreation center. They estimate the benefit to the community to be worth $2,000,000. Contractors have estimated a net cost to build the recreation center and to refurbish the property to be $3,100,000. Should they proceed with the project? A. 0.65 and Yes B. 0.65 and No C. 1.55 and Yes D. 1.55 and No. MCQ

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter24: Multistate Corporate Taxation

Section: Chapter Questions

Problem 10DQ

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A city council is considering converting an old industrial lot into a public recreation center. They estimate the benefit to the community to be worth $2,000,000. Contractors have estimated a net cost to build the recreation center and to refurbish the property to be $3,100,000. Should they proceed with the project? A. 0.65 and Yes B. 0.65 and No C. 1.55 and Yes D. 1.55 and No
A city council is considering converting an old industrial lot into a public recreation center. They estimate the benefit to the community to be worth $2,000,000. Contractors have estimated a net cost to build the recreation center and to refurbish the property to be $3,100,000. Should they proceed with the project? A. 0.65 and Yes B. 0.65 and No C. 1.55 and Yes D. 1.55 and No. Accounting MCQ
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Assume that, as a part of its economic development program, your governmental agency has committed to provide access to a new regional industrial park. This project must fund the construction of an on/off-interchange from an adjacent highway, a 2-mile length of 4-lane divided roadway, and a bridge that will cross a 500-foot wide river. The entire project is estimated to require 2 years to complete following planning & design.The roadway to be constructed is projected to cost $125,000 per lane mile. It will need to begin construction 12 months prior to the project’s estimated completion date. Your government controls the permitting process for the roadway and has already issued the necessary permits. The total roadway project will be paid for at its completion
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The city is installing a new swimming pool in the east end recreation centre. One design being considered is a reinforced concrete pool that will cost $5000000 to install. Thereafter, the inner surface of the pool will need to be refinished and painted every 10 years at a cost of $450000 per refinishing. Assuming that the pool will have essentially an infinite life, what is the present worth of the costs associated with the pool design? The city uses a MARR of 6%. Review the following table and calculate the present worth of the project for a +5% change in refinishing costs. Round your answer to the nearest dollar. Parameter Construction Costs Refinishing Costs MARR [%] -10% -5% Base Case +5% +10% $5000000 $450000 6 Present Worth of -10% -5% 0% +5% Costs +10% Changes to Construction Costs Changes to refinishing Costs Changes to MARR ????? ?