An Army Corps of Engineers project for improving navigation on the Ohio River will have an initial cost of $6,500,000 and annual maintenance of $130,000. Benefits for barges and paddle wheel touring boats are estimated at $820,000 per year. The project is assumed to be permanent and the discount rate is 8% per year. Determine if theCorps should proceed with the project.
An Army Corps of Engineers project for improving navigation on the Ohio River will have an initial cost of $6,500,000 and annual maintenance of $130,000. Benefits for barges and paddle wheel touring boats are estimated at $820,000 per year. The project is assumed to be permanent and the discount rate is 8% per year. Determine if theCorps should proceed with the project.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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An Army Corps of Engineers project for improving navigation on the
Ohio River will have an initial cost of $6,500,000 and annual
maintenance of $130,000. Benefits for barges and paddle wheel touring
boats are estimated at $820,000 per year. The project is assumed to be
permanent and the discount rate is 8% per year. Determine if theCorps
should proceed with the project.
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