A workshop designed to retrain workers 55 years of age and older who have lost their jobs is proposed. Suppose the workshop will increase the income of each participant by $1,000 per year for a period of 10 years.
a. Calculate the present value of the increased income per participant with each of the following discount rates: 0 percent, 1 percent, 3 percent, 5 percent, and 10 percent.
b. If the cost per participant is $8,000 and all those costs are incurred in the first year, at what discount rates will the benefit-cost ratio of the project exceed 1?

  • CreatedAugust 22, 2015
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