The cost of grading and spreading gravel on a curvy rural road is expected to be $300,000. The road will ha cost of $44,000 per year. Even though the new road is not very smooth, it allows access to an area that prev reached with off-road vehicles. The improved accessibility has led to a 154% increase in the property values previous market value of the property was $900,000, calculate the conventional B/C ratio using an interest r 20-year study period.

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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The cost of grading and spreading gravel on a curvy rural road is expected to be $300,000. The road will have to be maintained at a
cost of $44,000 per year. Even though the new road is not very smooth, it allows access to an area that previously could only be
reached with off-road vehicles. The improved accessibility has led to a 154% increase in the property values along the road. If the
previous market value of the property was $900,000, calculate the conventional B/C ratio using an interest rate of 6% per year and a
20-year study period.
The conventional B/C ratio is
0.604
Transcribed Image Text:The cost of grading and spreading gravel on a curvy rural road is expected to be $300,000. The road will have to be maintained at a cost of $44,000 per year. Even though the new road is not very smooth, it allows access to an area that previously could only be reached with off-road vehicles. The improved accessibility has led to a 154% increase in the property values along the road. If the previous market value of the property was $900,000, calculate the conventional B/C ratio using an interest rate of 6% per year and a 20-year study period. The conventional B/C ratio is 0.604
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