A council is considering improving the watershed. It hires an agency to determine the feasibility of the project. Suppose the costs and benefits for this watershed improvement project are below: Costs 0 $40,000 1 30,000 10,000 2 20,000 20,000 3 5,000 25,000 4 2,000 26,000 5 1,000 35,000 a. If your agency's discount rate is 8%, should your agency invest in this project? (Use the Net Present Value criterion in your analysis) b. If your agency's discount rate is greater than 8%, how do you think your answer in (a) would change? Why? (do not recalculate your answer) Year دیا Benefits SO
A council is considering improving the watershed. It hires an agency to determine the feasibility of the project. Suppose the costs and benefits for this watershed improvement project are below: Costs 0 $40,000 1 30,000 10,000 2 20,000 20,000 3 5,000 25,000 4 2,000 26,000 5 1,000 35,000 a. If your agency's discount rate is 8%, should your agency invest in this project? (Use the Net Present Value criterion in your analysis) b. If your agency's discount rate is greater than 8%, how do you think your answer in (a) would change? Why? (do not recalculate your answer) Year دیا Benefits SO
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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