Q2: Three mutually exclusive alternative public-works projects are currently under consideration. Their respective costs and benefits are included in the table below. Each of the projects has a useful life of 50 years, and MARR is 10% per year. Calculate which, if any, of these projects should be selected? Solve by hand. A В Capital investment $8,500,000 $10,000,000 $12,000,000 Annual operating and 750,000 725,000 700,000 maintenance costs Market value 1,250,000 1,750,000 2,000,000 Annual benefit 2,150,000 2,265,000 2,500,000

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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Q2: Three mutually exclusive alternative public-works projects are currently under consideration. Their
respective costs and benefits are included in the table below. Each of the projects has a useful life of 50
years, and MARR is 10% per year. Calculate which, if any, of these projects should be selected? Solve by
hand.
A
В
C
Capital investment
$8,500,000
$10,000,000
$12,000,000
Annual operating and
750,000
725,000
700,000
maintenance costs
Market value
1,250,000
1,750,000
2,000,000
Annual benefit
2,150,000
2,265,000
2,500,000
Transcribed Image Text:Q2: Three mutually exclusive alternative public-works projects are currently under consideration. Their respective costs and benefits are included in the table below. Each of the projects has a useful life of 50 years, and MARR is 10% per year. Calculate which, if any, of these projects should be selected? Solve by hand. A В C Capital investment $8,500,000 $10,000,000 $12,000,000 Annual operating and 750,000 725,000 700,000 maintenance costs Market value 1,250,000 1,750,000 2,000,000 Annual benefit 2,150,000 2,265,000 2,500,000
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