The government intends to build a sports center at a total cost of P250,000,000. The project will be financed by a foreign loan with an interest rate of 3% per year. The total annual cost for operating the facility would total P15,000,000. Annual revenues and benefits are estimated to be P45,000,000. If the structure is expected to last 40 years with no salvage value, calculate the following based on the equivalent uniform annual cost (EUAC) method: a. how much is the annual benefit of the project (in Php)? b. how much is the annual cost of the project (in Php)? c. what is the benefit cost ratio of the project?

The government intends to build a sports center at a total cost of P250,000,000. The project will be financed by a foreign loan with an interest rate of 3% per year. The total annual cost for operating the facility would total P15,000,000. Annual revenues and benefits are estimated to be P45,000,000. If the structure is expected to last 40 years with no salvage value, calculate the following based on the equivalent uniform annual cost (EUAC) method: a. how much is the annual benefit of the project (in Php)? b. how much is the annual cost of the project (in Php)? c. what is the benefit cost ratio of the project?

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Description: The government intends to build a sports center at a total cost of P250,000,000. The project will be financed by a foreign loan with an interest rate of3% per year. The total annual cost for operating the facility would total P15,000,000. Annual rev

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

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Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.

Question

The government intends to build a sports center at a total cost of P250,000,000. The project will be financed by a foreign loan with an interest rate of
3% per year. The total annual cost for operating the facility would total P15,000,000. Annual revenues and benefits are estimated to be P45,000,000. If
the structure is expected to last 40 years with no salvage value, calculate the following based on the equivalent uniform annual cost (EUAC) method:
a. how much is the annual benefit of the project (in Php)?
b. how much is the annual cost of the project (in Php)?
C. what is the benefit cost ratio of the project?

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