From the following data, use the conventional B/C ratio for a project that has a 20-year life to determine if it is economically justified. Use an interest rate of 8% per year. To the People Consequences To the Government Annual benefits $115,000 per year Annual disbenefits = $10,000 per year The B/C ratio is 0.84 The project is not justified First cost = $750,000 Annual cost = $91,000 per year Annual savings = $30,000 per year
From the following data, use the conventional B/C ratio for a project that has a 20-year life to determine if it is economically justified. Use an interest rate of 8% per year. To the People Consequences To the Government Annual benefits $115,000 per year Annual disbenefits = $10,000 per year The B/C ratio is 0.84 The project is not justified First cost = $750,000 Annual cost = $91,000 per year Annual savings = $30,000 per year
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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