Construction Cost, Annual Site $ millions Benefits, $ A 6 350,000 B 8 420,000 3 125,000 D 10 400,000 E 5 350,000 F 11 700,000

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
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The Army Corps of Engineers wants to construct a dam on a flood-prone river. The estimated construction cost and average annual dollar benefits are listed below. A 6% per year rate applies and dam life is infinite for analysis purposes. (a) Select the one best location using the B/C method. (b) If the sites are now considered independent projects, which sites are acceptable?

Construction Cost,
Annual
Site
$ millions
Benefits, $
A
6
350,000
B
8
420,000
3
125,000
D
10
400,000
E
5
350,000
F
11
700,000
Transcribed Image Text:Construction Cost, Annual Site $ millions Benefits, $ A 6 350,000 B 8 420,000 3 125,000 D 10 400,000 E 5 350,000 F 11 700,000
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