As part of the rehabilitation of the downtown area of a southern U.S. city,the Parks and Recreation Department expects to develop the space belowseveral overpasses into basketball, handball, miniature golf, and tenniscourts. The estimates are: initial cost of $190,000, life of 20 years, andannual M&O costs of $21,000. The department expects 20,000 people peryear to use the facilities an average of 2 hours each. The value of the recre-ation has been conservatively set at $1.00 per hour. At a discount rate of 6%per year, what is the B/C ratio for the project?а. 1.06b. 1.25O c. 1.09O d. 1.04

B/C analysis i.e. benefit cost analysis compute the ratio of benefits and costs in the similar time…

creation Department expects to develop the spa es into basketball, handball, miniature golf, ar ates are: initial cost of $190,000, life of 20 ye s of $21,000. The department expects 20,000 pe cilities an average of 2 hours each. The value of t nservatively set at $1.00 per hour. At a discount r he B/C ratio for the project?

creation Department expects to develop the spa es into basketball, handball, miniature golf, ar ates are: initial cost of $190,000, life of 20 ye s of $21,000. The department expects 20,000 pe cilities an average of 2 hours each. The value of t nservatively set at $1.00 per hour. At a discount r he B/C ratio for the project?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

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