The ferry operator charges 22 per person.It costs him Rs.7 per person. 50,000 persons use the ferryservice. (This means that the number of persons crossing the river by ferryservice throughout the year is 50,000)The government is considering construction of a bridge over the river. It isestimated that after the bridge is constructed 250,000 persons will cross theriver on the bridge. The bridge is expected to cost 3 million initially andits annual maintenance cost would be 10,000. It has an indefinitely longlife. Once the bridge is constructed the ferry operator is expected to close downthe ferry service and sell the ferry boats for 100,000.Portray the benefit cost ratio of the above scenario.

Operator charge per person = 22 Costs per person = 7 Number people use ferry = 50,000 If bridge is…

Answered: The ferry operator charges 22 per…

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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the city has just built an indoor soccer complex at a cost of 2,250,000 and considers it a long-lived project. The city estimates the maintenance cost of this complex will be 1,100 per month. the bank has indicated that interest is 6% compound monthly. What does the present value of the maintenance cost?
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