A sewage containment project in Louisiana is expected to require an initialinvestment of $3 million and annual maintenance expenses of $57,000. Thebenefits to the public are valued at $460,000 per year. This project can be assumed to have an infinite life. If MARR is 10% per year, determine whether the project is economically attractive using the B–C ratio measure of merit.
A sewage containment project in Louisiana is expected to require an initialinvestment of $3 million and annual maintenance expenses of $57,000. Thebenefits to the public are valued at $460,000 per year. This project can be assumed to have an infinite life. If MARR is 10% per year, determine whether the project is economically attractive using the B–C ratio measure of merit.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A sewage containment project in Louisiana is expected to require an initial
investment of $3 million and annual maintenance expenses of $57,000. The
benefits to the public are valued at $460,000 per year. This project can be assumed to have an infinite life. If MARR is 10% per year, determine whether the project is economically attractive using the B–C ratio measure of merit.
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