Calculate the modified benefit/cost ratios using an interest rate of 11% per year and an infinite project period.

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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Required information
The following data is provided for a PPP project.
Benefits
Disbenefits
To the People
$140,000 per year beginning now
$20,000 per year
The modified B/C ratio is
Cost
Savings
Calculate the modified benefit/cost ratios using an interest rate of 11% per year and an infinite project period.
To the Government
$1.8 million now and $200,000 every
3 years
$95,000 per year
Transcribed Image Text:Required information The following data is provided for a PPP project. Benefits Disbenefits To the People $140,000 per year beginning now $20,000 per year The modified B/C ratio is Cost Savings Calculate the modified benefit/cost ratios using an interest rate of 11% per year and an infinite project period. To the Government $1.8 million now and $200,000 every 3 years $95,000 per year
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