A public project requires an initial investment of $1,000,000 and annual operating cost of $200,000 over the next 10 years. In addition, it requires a major maintenance at the end of every five years at a cost of $250,000. It generates 30 new jobs. The annual benefit per job is $20,000. At an annual interest rate of 5%, is this project justified?

A public project requires an initial investment of $1,000,000 and annual operating cost of $200,000 over the next 10 years. In addition, it requires a major maintenance at the end of every five years at a cost of $250,000. It generates 30 new jobs. The annual benefit per job is $20,000. At an annual interest rate of 5%, is this project justified?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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