A city is considering building a new baseball complex that will take one year to build. The estimated financial data for the project is presented to the right.
Incremental annual benefits start in year 2 and incremental annual costs start in year 1
What is the Benefit Cost Ratio for this project? Is the project worth investing in using the Benefit Cost Analysis as the evaluating methodology? Why or why not?		Description	Data
		Initial investment	$ 20,000,000
		Investment at year 1	$ 500,000
		Incremental annual benefits	$ 1,800,000
		Incremental annual costs	$ 375,000
		Annual users fees (benefit)	$ 1,500,000
		Project life	15 years
		Discount rate	5%

Data A city is considering building a new baseball complex that will take one year to build. The Incremental annual benefits start in year 2 and incremental annual costs start in year 1 What is the Benefit Cost Ratio for this project? Is the project worth investing in using the Benefit Cost Analysis as the evaluating methodology? Why or why not? Description Initial investment Investment at year 1 Incremental annual benefits Incremental annual costs Annual users fees (benefit) Project life Discount rate 20,000,000 500,000 1,800,000 375,000 1,500,000 15 years $ 5% Data A city is considering building a new baseball complex that will take one year to build. The estimated financial data for the project is presented to the right. Incremental annual benefits start in year 2 and incremental annual costs start in year 1 What is the Benefit Cost Ratio for this project? Is the project worth investing in using the Benefit Cost Analysis as the evaluating methodology? Why or why not? Description Initial investment Investment at year 1 Incremental annual benefits Incremental annual costs Annual users fees (benefit) Project life Discount rate $ $ 20,000,000 500,000 1,800,000 375,000 1,500,000 15 year 5%