A flood control project will have a first cost of $1079296 with an annual maintenance cost of $41242 and a 10-year life. Reduced flood damage is expected to amount to $190803 per year. Lost income to farmers is estimated to be $21669 per year. At an interest rate of 6% per year, calculate the conventional Benefit/Cost ratio which will will show us if the project should be undertaken.
A flood control project will have a first cost of $1079296 with an annual maintenance cost of $41242 and a 10-year life. Reduced flood damage is expected to amount to $190803 per year. Lost income to farmers is estimated to be $21669 per year. At an interest rate of 6% per year, calculate the conventional Benefit/Cost ratio which will will show us if the project should be undertaken.
Chapter1: Making Economics Decisions
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Transcribed Image Text:A flood control project will have a first cost
of
$1079296 with an annual maintenance cost
of
$41242 and a 10-year life. Reduced flood
damage
is expected to amount to $190803 per year.
Lost
income to farmers is estimated to be
$21669 per
year. At an interest rate of 6% per year,
calculate
the conventional Benefit/Cost ratio which
will
will show us if the project should be
undertaken.
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