Your NGO is considering supporting two independent public sector opportunities. There are sufficient funds available to permit supporting both. Opportunity 1 will require an initial investment of $550,000 in capital costs, has ak present worth of operating costs of $575,000 and will provide a present worth of benefits of $875,000. It's life expectancy is ten years. Opportunity 2 will require an initial investment of $380,000 in capital costs, has a present worth of operating costs of $395,000 and will provide a present worth of benefits of $675 000 It'e life
Your NGO is considering supporting two independent public sector opportunities. There are sufficient funds available to permit supporting both. Opportunity 1 will require an initial investment of $550,000 in capital costs, has ak present worth of operating costs of $575,000 and will provide a present worth of benefits of $875,000. It's life expectancy is ten years. Opportunity 2 will require an initial investment of $380,000 in capital costs, has a present worth of operating costs of $395,000 and will provide a present worth of benefits of $675 000 It'e life
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Your NGO is considering supporting two independent public sector opportunities.
There are sufficient funds available to permit supporting both.
Opportunity 1 will require an initial investment of $550,000 in capital costs, has ak
present worth of operating costs of $575,000 and will provide a present worth of
benefits of $875,000. It's life expectancy is ten years.
Opportunity 2 will require an initial investment of $380,000 in capital costs, has a
present worth of operating costs of $395,000 and will provide a present worth of
benefits of $675,000. It's life expectancy is fifteen years.
Use MBCR as your method of assessing the opportunities, and determine whether an
investment should be made in opportunity 1, opportunity 2, or both. Upload the
solution to this problem to Question 1 in Crowdmark.
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