ENGINEERING ECONOMICS The ABC Foundation expects to award Php15,000,000 in grants to public high schools. The grants will extend over a 10-year period and will create an estimated savings of Php1,500,000 per year in faculty salaries and student-related expenses. The Foundation uses a rate of return of 6% per year on all grant awards. This grant program will share Foundation funding with ongoing activities, so an estimated Php200,000 per year will be removed from other program funding. To make this program successful, a Php500,000 per year operating cost will be incurred from the regular M&O budget. Use the B/C method to determine if the grant program is economically justified.
ENGINEERING ECONOMICS The ABC Foundation expects to award Php15,000,000 in grants to public high schools. The grants will extend over a 10-year period and will create an estimated savings of Php1,500,000 per year in faculty salaries and student-related expenses. The Foundation uses a rate of return of 6% per year on all grant awards. This grant program will share Foundation funding with ongoing activities, so an estimated Php200,000 per year will be removed from other program funding. To make this program successful, a Php500,000 per year operating cost will be incurred from the regular M&O budget. Use the B/C method to determine if the grant program is economically justified.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The ABC Foundation expects to award Php15,000,000 in grants to public high schools. The grants will extend over a 10-year period and will create an estimated savings of Php1,500,000 per year in faculty salaries and student-related expenses. The Foundation uses a
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