A municipality has just spent $8 million to build a second bridge across the city river to handle the increased traffic between the banks. City engineer calculated that the bridge allows to reduce travel time for the road users by $15.5 million over the 25-year period of the service life of the bridge calculated in terms of today's dollars. The construction also leads to a decrease in the value of surrounding property by $6.4 million over the service life in terms of today's dollars. The bridge requires $3.5 million for operation and maintenance over its service life in terms of today's dollars. What is the benefit-cost ratio of the project? 1.08 1.32 1.94 0.87 0.96
A municipality has just spent $8 million to build a second bridge across the city river to handle the increased traffic between the banks. City engineer calculated that the bridge allows to reduce travel time for the road users by $15.5 million over the 25-year period of the service life of the bridge calculated in terms of today's dollars. The construction also leads to a decrease in the value of surrounding property by $6.4 million over the service life in terms of today's dollars. The bridge requires $3.5 million for operation and maintenance over its service life in terms of today's dollars. What is the benefit-cost ratio of the project? 1.08 1.32 1.94 0.87 0.96
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Question 18
A municipality has just spent $8 million to build a second bridge across the city river to handle the increased traffic between the banks. City
engineer calculated that the bridge allows to reduce travel time for the road users by $15.5 million over the 25-year period of the service life
of the bridge calculated in terms of today's dollars. The construction also leads to a decrease in the value of surrounding property by $6.4
million over the service life in terms of today's dollars. The bridge requires $3.5 million for operation and maintenance over its service life in
terms of today's dollars. What is the benefit-cost ratio of the project?
1.08
1.32
1.94
O 0.87
0.96](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F790080fb-59d1-4f0a-b6b8-e414617648c8%2F9ee6a41f-645d-4f84-b74d-9ae09e2c61d4%2Fgkypblb_processed.png&w=3840&q=75)
Transcribed Image Text:Question 18
A municipality has just spent $8 million to build a second bridge across the city river to handle the increased traffic between the banks. City
engineer calculated that the bridge allows to reduce travel time for the road users by $15.5 million over the 25-year period of the service life
of the bridge calculated in terms of today's dollars. The construction also leads to a decrease in the value of surrounding property by $6.4
million over the service life in terms of today's dollars. The bridge requires $3.5 million for operation and maintenance over its service life in
terms of today's dollars. What is the benefit-cost ratio of the project?
1.08
1.32
1.94
O 0.87
0.96
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