The Waterloo Region Municipality plans to spend $265,000,000 for the installation of a light rail train...

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The Waterloo Region Municipality plans to spend $265,000,000 for the installation of a light rail train service. Annual Maintenance and Operating costs are estimated at $2,887,500 per year. The installation of the light rail train service will reduce laneways for cars, reduce the number of parking spots, and disrupt local businesses during the construction phase. As a result, the dis-benefits of the light rail train service is estimated to be $1, 237, 500 per year. The lifetime of the rail service is indefinite and the cost of borrowing money for the Waterloo Region Municipality is 4.00% per year. What is the minimum annual benefit that the light rail train service must achieve in order to be a project worth pursuing? Paragraph BI UVA/ Benefit=14725000 + www The Waterloo Region Municipality plans to spend $265,000,000 for the installation of a light rail train service. Annual Maintenance and Operating costs are estimated at $2,887,500 per year. The installation of the light rail train service will reduce laneways for cars, reduce the number of parking spots, and disrupt local businesses during the construction phase. As a result, the dis-benefits of the light rail train service is estimated to be $1, 237, 500 per year. The lifetime of the rail service is indefinite and the cost of borrowing money for the Waterloo Region Municipality is 4.00% per year. What is the minimum annual benefit that the light rail train service must achieve in order to be a project worth pursuing? Paragraph BI UVA/ Benefit=14725000 + www

Answer rating: 100% (QA)

To evaluate whether the light rail project is worth pursuing we need to calculate the minimum annual ... View the full answer