The project is to construct a lateral canal that will provide irrigation for 150 ha production area along the ricefields of Villaverde and it is being considered by the municipality. The locality has two (wet and dry) croppings. A one (1) ha ricefarm yields 90 cavans for rainfed areas. The following costs have been identified. Land: 800 meters long x 6 meters parcel of land at Php 950.00 per ha Construction: 4,500,000.00 Annual O&M (government): 500,000.00 Annual O&M (farmer irrigators): 250,000.00 Rental receipts from irrigators: 17 cav/ha Convenience to farmers: 500,000.00 Yield increase: 22% Neglecting other factors associated with production yield increase, determine the B/C ratio of the project with a MARR of 10% per year if the project is to be used for 25 years. Is the project acceptable?
The project is to construct a lateral canal that will provide irrigation for 150 ha production area along the ricefields of Villaverde and it is being considered by the municipality. The locality has two (wet and dry) croppings. A one (1) ha ricefarm yields 90 cavans for rainfed areas. The following costs have been identified. Land: 800 meters long x 6 meters parcel of land at Php 950.00 per ha Construction: 4,500,000.00 Annual O&M (government): 500,000.00 Annual O&M (farmer irrigators): 250,000.00 Rental receipts from irrigators: 17 cav/ha Convenience to farmers: 500,000.00 Yield increase: 22% Neglecting other factors associated with production yield increase, determine the B/C ratio of the project with a MARR of 10% per year if the project is to be used for 25 years. Is the project acceptable?
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 project is to construct a lateral canal that will provide irrigation for 150 ha production area along the
ricefields of Villaverde and it is being considered by the municipality. The locality has two (wet and dry)
croppings. A one (1) ha ricefarm yields 90 cavans for rainfed areas. The following costs have been
identified.
Land: 800 meters long x 6 meters parcel of land
at Php 950.00 per ha
Construction: 4,500,000.00
Annual O&M (government): 500,000.00
Annual O&M (farmer irrigators): 250,000.00
Rental receipts from irrigators: 17 cav/ha
Convenience to farmers: 500,000.00
Yield increase: 22%
Neglecting other factors associated with production yield increase, determine the B/C ratio of the project
with a MARR of 10% per year if the project is to be used for 25 years. Is the project acceptable?
Transcribed Image Text:1. The project is to construct a lateral canal that will provide irrigation for 150 ha production area along the
ricefields of Villaverde and it is being considered by the municipality. The locality has two (wet and dry)
croppings. A one (1) ha ricefarm yields 90 cavans for rainfed areas. The following costs have been
identified.
Land:
800 meters long x 6 meters parcel of land
at Php 950.00 per ha
4,500,000.00
500,000.00
250,000.00
Construction:
Annual O&M (government):
Annual O&M (farmer irrigators):
Rental receipts from irrigators:
17 cav/ha
Convenience to farmers:
500,000.00
Yield increase:
22%
Neglecting other factors associated with production yield increase, determine the B/C ratio of the project
with a MARR of 10% per year if the project is to be used for 25 years. Is the project acceptable?
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