Problem 07.007 - Conventional B/C ratio for road improvement project The cost of grading and spreading gravel on a curvy rural road is expected to be $300,000. The road will have to be maintained cost of $34,000 per year. Even though the new road is not very smooth, it allows access to an area that previously could only be reached with off-road vehicles. The improved accessibility has led to a 144% increase in the property values along the road. If the previous market value of the property was $900,000, calculate the conventional B/C ratio using an interest rate of 6% per year a 20-year study period. The conventional B/C ratio is
Problem 07.007 - Conventional B/C ratio for road improvement project The cost of grading and spreading gravel on a curvy rural road is expected to be $300,000. The road will have to be maintained cost of $34,000 per year. Even though the new road is not very smooth, it allows access to an area that previously could only be reached with off-road vehicles. The improved accessibility has led to a 144% increase in the property values along the road. If the previous market value of the property was $900,000, calculate the conventional B/C ratio using an interest rate of 6% per year a 20-year study period. The conventional B/C ratio is
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
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Transcribed Image Text:Problem 07.007 - Conventional B/C ratio for road improvement project
The cost of grading and spreading gravel on a curvy rural road is expected to be $300,000. The road will have to be maintained at a
cost of $34,000 per year. Even though the new road is not very smooth, it allows access to an area that previously could only be
reached with off-road vehicles. The improved accessibility has led to a 144% increase in the property values along the road. If the
previous market value of the property was $900,000, calculate the conventional B/C ratio using an interest rate of 6% per year and a
20-year study period.
The conventional B/C ratio is
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