A flood control project with a life of 16 years will require an investment of $60,000 and annual maintenance costs of $5,000. The project will provide no benefits for the first two years but will save $24,000 per year in flood damagestarting in the third year. The appropriate MARR is 12% per year. Use this information to answer What is the conventional B–C ratio for the flood control project? (a) 1.53 (b) 1.33 (c) 1.76 (d) 2.20 (e) 4.80. Select the closest answer.

A flood control project with a life of 16 years will require an investment of $60,000 and annual maintenance costs of $5,000. The project will provide no benefits for the first two years but will save $24,000 per year in flood damagestarting in the third year. The appropriate MARR is 12% per year. Use this information to answer What is the conventional B–C ratio for the flood control project? (a) 1.53 (b) 1.33 (c) 1.76 (d) 2.20 (e) 4.80. Select the closest answer.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...

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A flood control project with a life of 14 years will require an investment of $57,000 and annual maintenance costs of $4,000. The project will provide no benefits for the first three years but will save $22,000 per year in flood damage starting in the fourth year. The appropriate MARR is 11% per year. What is the modifie B-C ratio for the flood control project? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year. Choose the closest answer below. i More Info O A. The modified B-C ratio for the flood control project is 3.43. O B. The modified B-C ratio for the flood control project is 1.26. O C. The modified B-C ratio for the flood control project is 1.18. Discrete Compounding; i= 11% Uniform Series Single Payment Compound Amount O D. The modified B-C ratio for the flood control project is 1.75. Compound Amount Sinking Fund Factor To Find A Сaptal Recovery Factor O E. The modified B-C ratio for the flood control project is 1.64.…
A flood control project with a life of 16 years will require an investment of $60,000 and annual maintenance costs of $5,000. The project will provide no benefits for the first two years but will save $24,000 per year in flood damage starting in the third year. The appropriate MARR is 12% per year. Use this information to answer What is the modified B–C ratio for the flood control project? (a) 1.53 (b) 1.33 (c) 1.76 (d) 2.20 (e) 4.80. Select the closest answer.
A permanent flood control dam is expected to have an initial cost of $2.8 million and an annual upkeep cost of $20,000. In addition, minor reconstruction will be required every 5 years at a cost of $200,000. As a result of the dam, flood damage will be reduced by an average of $180,000 per year. Using an interest rate of 6% per year, the conventional B/C ratio will be closest to:a. 0.46b. 0.81c. 0.97d. 1.06
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Use the following information for problems 4, 5, 6, and 7 A project initially costs $40,000 and has a 10 year lifetime. The project returns benefits of S10,000 at the end of the first year, increasing by 12% in each of the following years. Costs are incurred at a rate of S4,000 per year. The anticipated salvage value is S7,000. MARR = 15%. 4. The benefit/cost ratio is closest to ... a) 1.24 b) 1.27 c) 1.30 O 1.33 e) 1.37 ) 1.41 g) 1.43 h) 1.45 5. The simple payback period is closest to ... D4.7 years b) 3.5 years c) 8.1 years d) 4.9 years e) 4.5 years f) 4.1 years g) 8.4 years h) 5.7 years i) a payback period does not occur
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You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. a. Calculate the PW and FW of this proposal? b. What is the ERR ( E=MARR) of this proposal? c. What is the Simple and Discounted payback? (Upload the picture of your complete solutions including the correct cash flow diagram and your conclusion.)
A $1,000 investment in project that returns $100/year for 5 years is to be compared with a $700 investment in a project that returns $90/year for 4 years. What would be a good metric(s) for comparing these projects? A. Equivalent uniform annual cash flow, only. B. Internal rate of return (only correct choice of these options) C. Internal rate of return and equivalent uniform annual cash flow D. Benefit to cost ratio and internal rate of return E. Benefit to cost ratio (only correct choice of these options) Give answer fast and only type answer
1. A cost-benefit analysis of a new irrigation project indicates that the net benefits (B C) of the project in each of the first four years will be $2 million. Thereafter, the project will yield positive net benefits of $750,000 for the next 20 years. Calculate the present valueof benefits minus costs when the social rate of discount is 10 percent. You can use spreadsheet software to do this calculation. Does the program merit approval? How would the present value of the net benefits change if the social rate of discount were 15 percent?
You are considering the following project. What is the NPV of the project? WACC of the project: 0.10 Revenue growth rate: 0.05 Tax rate: 0.40 Revenue for year 1: 13,000 Fixed costs for year 1: 3,000 variable costs (% of revenue): 0.30 project life: 3 years Economic life of equipment: 3 years Cost of equipment: 20,000 Salvage value of equipment: 4,000 Initial investment in net working capital: 2,000
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