Suppose you are considering a project has an initial cost of $750 that has an ongoing benefit of $275. Further, there is an ongoing cost that is equal to $90, which increases by $10 each year. Assume the project lasts 6 years. If the appropriate discount rate is 5.5%. Calculate: a) the Net Present Value = $57.07 b) the Benefit Cost Ratio = c) should the project be accepted or rejected? Explain your answer using the information from part a) and b). Answer = (accept/reject) Provide your answers to two decimal places. Do not include any commas (,) "$" or

Suppose you are considering a project has an initial cost of $750 that has an ongoing benefit of $275. Further, there is an ongoing cost that is equal to $90, which increases by $10 each year. Assume the project lasts 6 years. If the appropriate discount rate is 5.5%. Calculate: a) the Net Present Value = $57.07 b) the Benefit Cost Ratio = c) should the project be accepted or rejected? Explain your answer using the information from part a) and b). Answer = (accept/reject) Provide your answers to two decimal places. Do not include any commas (,) "$" or

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose you are considering a project has an initial cost of $750 that has an ongoing
benefit of $275. Further, there is an ongoing cost that is equal to $90, which increases by
$10 each year. Assume the project lasts 6 years.
If the appropriate discount rate is 5.5%.
Calculate:
a) the Net Present Value = $ 57.07
b) the Benefit Cost Ratio =
c) should the project be accepted or rejected? Explain your answer using the information
from part a) and b). Answer =
(accept/reject)
Provide your answers to two decimal places. Do not include any commas (,) "$" or

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