An Army Corps of Engineers project for improving navigation on the Ohio River will have an initial cost of $6,450,000 and annualmaintenance of $135,000. Benefits for barges and paddle wheel touring boats are estimated at $775,000 per year. The project isassumed to be permanent, and the discount rate is 10% per year. Determine if the Corps should proceed with the project.The B/C ratio isThe project is economically not justified

B/C (benefit-cost) ratio is the relationship between the costs and benefits of a particular project.…

Answered: The B/C ratio is The project is…

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The B/C ratio is The project is economically not justified

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

An Army Corps of Engineers project for improving navigation on the Ohio River will have an initial cost of $6,450,000 and annual
maintenance of $135,000. Benefits for barges and paddle wheel touring boats are estimated at $775,000 per year. The project is
assumed to be permanent, and the discount rate is 10% per year. Determine if the Corps should proceed with the project.
The B/C ratio is
The project is economically not justified

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