A state-funded water irrigation project in the province of Davao del Sur for the rice farmers will cost $50,000 as per the winning contractor during the public bidding. The benefits that can be generated at the end of the first year are estimated to be $10,000, increasing at a 10% uniform rate in subsequent years. While the annual operating and maintenance costs is estimated to be $2,000. Using an 8-year study period and a 10% interest rate, determine whether the project is economically attractive utilizing the B/C analysis using Present Worth: a. Conventional b. Modified
A state-funded water irrigation project in the province of Davao del Sur for the rice farmers will cost $50,000 as per the winning contractor during the public bidding. The benefits that can be generated at the end of the first year are estimated to be $10,000, increasing at a 10% uniform rate in subsequent years. While the annual operating and maintenance costs is estimated to be $2,000. Using an 8-year study period and a 10% interest rate, determine whether the project is economically attractive utilizing the B/C analysis using Present Worth: a. Conventional b. Modified
Chapter1: Making Economics Decisions
Section: Chapter Questions
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