A tax exempt municipality is considering the construction of a new municipal waste water treatment facility. Two different sites have been selected as technically, politically, socially, and financially feasible. The city council uses 6% interest rate for all analyses for public projects. The expected cash flow for the two alternatives are as follow: Year Alt. A Alt. B 0 - $15,072,472 - $25,872,924 1 - 75 $2,187,697/year $3,090,903/year What is the incremental benefit/cost ratio?
A tax exempt municipality is considering the construction of a new municipal waste water treatment facility. Two different sites have been selected as technically, politically, socially, and financially feasible. The city council uses 6% interest rate for all analyses for public projects. The expected cash flow for the two alternatives are as follow: Year Alt. A Alt. B 0 - $15,072,472 - $25,872,924 1 - 75 $2,187,697/year $3,090,903/year What is the incremental benefit/cost ratio?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A tax exempt municipality is considering the construction of a new municipal waste water treatment facility. Two different sites have been selected as technically, politically, socially, and financially feasible. The city council uses 6% interest rate for all analyses for public projects. The expected cash flow for the two alternatives are as follow:
| Year | Alt. A | Alt. B |
| 0 | - $15,072,472 | - $25,872,924 |
| 1 - 75 | $2,187,697/year | $3,090,903/year |
What is the incremental benefit/cost ratio?
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