The ferry operator charges 22 per person. It costs him Rs.7 per person. 50,000 persons use the ferry service. (This means that the number of persons crossing the river by ferry service throughout the year is 50,000) The government is considering construction of a bridge over the river. It is estimated that after the bridge is constructed 250,000 persons will cross the river on the bridge. The bridge is expected to cost 3 million initially and its annual maintenance cost would be 10,000. It has an indefinitely long life. Once the bridge is constructed the ferry operator is expected to close down the ferry service and sell the ferry boats for 100,000. Portray the benefit cost ratio of the above scenario.
The ferry operator charges 22 per person. It costs him Rs.7 per person. 50,000 persons use the ferry service. (This means that the number of persons crossing the river by ferry service throughout the year is 50,000) The government is considering construction of a bridge over the river. It is estimated that after the bridge is constructed 250,000 persons will cross the river on the bridge. The bridge is expected to cost 3 million initially and its annual maintenance cost would be 10,000. It has an indefinitely long life. Once the bridge is constructed the ferry operator is expected to close down the ferry service and sell the ferry boats for 100,000. Portray the benefit cost ratio of the above scenario.
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
Problem 1PS
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Question
![The ferry operator charges 22 per person.
It costs him Rs.7 per person. 50,000 persons use the ferry
service. (This means that the number of persons crossing the river by ferry
service throughout the year is 50,000)
The government is considering construction of a bridge over the river. It is
estimated that after the bridge is constructed 250,000 persons will cross the
river on the bridge. The bridge is expected to cost 3 million initially and
its annual maintenance cost would be 10,000. It has an indefinitely long
life. Once the bridge is constructed the ferry operator is expected to close down
the ferry service and sell the ferry boats for 100,000.
Portray the benefit cost ratio of the above scenario.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb567900a-5979-4a9b-afe3-afec12c1d4bd%2Ff0b117c4-699a-49c5-a457-1005ecedf79a%2Fixdr4lg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The ferry operator charges 22 per person.
It costs him Rs.7 per person. 50,000 persons use the ferry
service. (This means that the number of persons crossing the river by ferry
service throughout the year is 50,000)
The government is considering construction of a bridge over the river. It is
estimated that after the bridge is constructed 250,000 persons will cross the
river on the bridge. The bridge is expected to cost 3 million initially and
its annual maintenance cost would be 10,000. It has an indefinitely long
life. Once the bridge is constructed the ferry operator is expected to close down
the ferry service and sell the ferry boats for 100,000.
Portray the benefit cost ratio of the above scenario.
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