The first cost of grading and spreading gravel on a short rural road is expected to be $700,000. The road will have to be maintained at a cost of $25,000 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. This improved accessibility has increased the property values along the road from $400,000 to $600,000. The conventional B/C ratio at an interest rate of 6% per year for a 10-year study period is closest to: (a) 1.3 (b) 1.7 (c) 2.1 (d) 2.8
The first cost of grading and spreading gravel on a short rural road is expected to be $700,000. The road will have to be maintained at a cost of $25,000 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. This improved accessibility has increased the property values along the road from $400,000 to $600,000. The conventional B/C ratio at an interest rate of 6% per year for a 10-year study period is closest to: (a) 1.3 (b) 1.7 (c) 2.1 (d) 2.8
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 first cost of grading and spreading gravel on a
short rural road is expected to be $700,000. The
road will have to be maintained at a cost of
$25,000 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.
This improved accessibility has increased the
property values along the road from $400,000 to
$600,000. The conventional B/C ratio at an interest
rate of 6% per year for a 10-year study period
is closest to:
(a) 1.3 (b) 1.7
(c) 2.1 (d) 2.8
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