In a certain city the promotion of tourism in the city is being considered. It will cost $6,000 to develop the plan. The anticipated annual benefits and costs are as follows: • Annual benefits: Increased local revenue and tax collection $117,400 • Annual support service: expansion of parking lots, restrooms, surveillance and street repairs $48,830 If the city government uses a discount rate of 10% and a study period of 5 years, this tourism project is justifiable according to cost-benefit analysis?
In a certain city the promotion of tourism in the city is being considered. It will cost $6,000 to develop the plan. The anticipated annual benefits and costs are as follows: • Annual benefits: Increased local revenue and tax collection $117,400 • Annual support service: expansion of parking lots, restrooms, surveillance and street repairs $48,830 If the city government uses a discount rate of 10% and a study period of 5 years, this tourism project is justifiable according to cost-benefit analysis?
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
Related questions
Question
In a certain city the promotion of tourism in the city is being considered. It will cost $6,000 to develop the plan. The anticipated annual benefits and costs are as follows:
• Annual benefits: Increased local revenue and tax collection $117,400
• Annual support service: expansion of parking lots, restrooms, surveillance and street repairs $48,830 If the city government uses a discount rate of 10% and a study period of 5 years,
this tourism project is justifiable according to cost-benefit analysis?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning