Dunkin City wants to build a new bypass between two major roads that will cut travel time for commuters. The road will cost $16,000,000 and save 17,500 people $100/year on gas. The road will need to be resurfaced every year at a cost of $10,000. The road is to be used for 20 years. Use B/C analysis to determine whether Dunkin City should build the road. The cost of money is 8%.
Dunkin City wants to build a new bypass between two major roads that will cut travel time for commuters. The road will cost $16,000,000 and save 17,500 people $100/year on gas. The road will need to be resurfaced every year at a cost of $10,000. The road is to be used for 20 years. Use B/C analysis to determine whether Dunkin City should build the road. The cost of money is 8%.
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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Dunkin City wants to build a new bypass between two major roads that will cut travel time for commuters. The road will cost $16,000,000 and save 17,500 people $100/year on gas. The road will need to be resurfaced every year at a cost of $10,000. The road is to be used for 20 years. Use B/C analysis to determine whether Dunkin City should build the road. The cost of money is 8%.
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