A county will invest $5,400,000 to clean up a chemical spill that occurred following a natural disaster. At the end of the 13-year planning horizon, an additional $1,300,000 will be spent in restoring the site to an environmentally acceptable condition. The investment is expected to produce net annual benefits that will decrease by 22% each year. The net annual public benefit in the 1st year is estimated to be $3,400,000. Determine the B/C ratio for the investment using a 5% MARR. Click here to access the TVM Factor Table calculator.
A county will invest $5,400,000 to clean up a chemical spill that occurred following a natural disaster. At the end of the 13-year planning horizon, an additional $1,300,000 will be spent in restoring the site to an environmentally acceptable condition. The investment is expected to produce net annual benefits that will decrease by 22% each year. The net annual public benefit in the 1st year is estimated to be $3,400,000. Determine the B/C ratio for the investment using a 5% MARR. Click here to access the TVM Factor Table calculator.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:A county will invest $5,400,000 to clean up a chemical spill that occurred following a natural disaster. At the end of the 13-year
planning horizon, an additional $1,300,000 will be spent in restoring the site to an environmentally acceptable condition. The
investment is expected to produce net annual benefits that will decrease by 22% each year. The net annual public benefit in the 1st
year is estimated to be $3,400,000. Determine the B/C ratio for the investment using a 5% MARR.
Click here to access the TVM Factor Table calculator.
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