The budget commission approved the monitoring with 4000 security cameras, each of which is 300 ECU, to ensure the security of the border line along the 1300 km long Southeastern border line. In addition to the cost of the cameras, other costs are determined to be 3.2M ECU per year. The earnings related to the prevention of dangerous and harmful crossings are estimated to be 5.1 M ECU per year. Profit-Cost (conversion rate) ratio is required to be greater than 1. Is the investment suitable for an annual interest rate of 6% for the 10-year project period?

Answer rating: 100% (QA)

To determine if the investment is suitable we need to calculate the Net Present Value NPV of the pro... View the full answer