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The table below shows cash flow estimates for a project. The B/C ratio for the following cash flow estimates calculated at an interest rate of 8.5% is less than 1, which means that the project is currently not justified. Project Items PW of benefits, $ AW of disbenefits, $/year First cost, $ M&O costs, $/yr Life, years What would the maximum first cost be for this project to be justified? 1,092k 864k 776k 674k 660k Estimate 3,300,000 48,500 1,000,000 243,000 18

The table below shows cash flow estimates for a project. The B/C ratio for the following cash flow estimates calculated at an interest rate of 8.5% is less than 1, which means that the project is currently not justified. Project Items PW of benefits, $ AW of disbenefits, $/year First cost, $ M&O costs, $/yr Life, years What would the maximum first cost be for this project to be justified? 1,092k 864k 776k 674k 660k Estimate 3,300,000 48,500 1,000,000 243,000 18

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The table below shows cash flow estimates for a project. The B/C ratio for the following cash flow estimates calculated at an interest rate of 8.5% is less than 1, which means that the project is currently not justified. Project Items PW of benefits, $ AW of disbenefits, $/year First cost, $ M&O costs, $/yr Life, years What would the maximum first cost be for this project to be justified? 1,092k 864k 776k 674k 660k Estimate 3,300,000 48,500 1,000,000 243,000 18
Transcribed Image Text:The table below shows cash flow estimates for a project. The B/C ratio for the following cash flow estimates calculated at an interest rate of 8.5% is less than 1, which means that the project is currently not justified. Project Items PW of benefits, $ AW of disbenefits, $/year First cost, $ M&O costs, $/yr Life, years What would the maximum first cost be for this project to be justified? 1,092k 864k 776k 674k 660k Estimate 3,300,000 48,500 1,000,000 243,000 18
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