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

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