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rate is 1,000,000 vehicles. Determine public project is justified (i=5%). O The project is justified O The project is not justified

rate is 1,000,000 vehicles. Determine public project is justified (i=5%). O The project is justified O The project is not justified

Essentials Of Investments
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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2. A bridge connecting two towns costs $15,000,000, has an average annual operating cost of $450,000 and a life of 50 years. It requires a onetime major overhaul in 25 years at a cost of $1,800,000. The sponsors of the project can collect an average toll of $2.50 for each passing vehicle. There will be also $3,000, 000 annual benefits to the communities due to time savings and accident reduction from shorter trips. The total (two-way) annual traffic rate is 1,000,000 vehicles. Determine if this public project is justified (i=5%). O The project is justified O The project is not justified
Transcribed Image Text:2. A bridge connecting two towns costs $15,000,000, has an average annual operating cost of $450,000 and a life of 50 years. It requires a onetime major overhaul in 25 years at a cost of $1,800,000. The sponsors of the project can collect an average toll of $2.50 for each passing vehicle. There will be also $3,000, 000 annual benefits to the communities due to time savings and accident reduction from shorter trips. The total (two-way) annual traffic rate is 1,000,000 vehicles. Determine if this public project is justified (i=5%). O The project is justified O The project is not justified
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