Suppose that the City of Nairobi is planning a bid to host the 2032 Olympics and Kas estimated the following benefits: The estimat benefits at the end of year 1 (a,) are $300 million, at the end of year 2 (B.) are $200 million, and at the end of year 3 (s,) only $100 million (after the third year there are no further benefits). If the estimated interest rate is 4% (r0.04) then using the estimated value of benefits equation below, calculate the maximum value (and therefore, the maximum amount that Nairobi should bid) for the 2032 Olympics. B, V (1+ (1+) (1+r)

Suppose that the City of Nairobi is planning a bid to host the 2032 Olympics and Kas estimated the following benefits: The estimat benefits at the end of year 1 (a,) are $300 million, at the end of year 2 (B.) are $200 million, and at the end of year 3 (s,) only $100 million (after the third year there are no further benefits). If the estimated interest rate is 4% (r0.04) then using the estimated value of benefits equation below, calculate the maximum value (and therefore, the maximum amount that Nairobi should bid) for the 2032 Olympics. B, V (1+ (1+) (1+r)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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