A local government hazardous waste collection project is proposed for a 3 year experiment trial. Specifics of
Question:
A local government hazardous waste collection project is proposed for a 3 year experiment trial. Specifics of project:
Nominal discount rate of 3%
project does not start for two years and lasts for three years
Project capital cost include first year expense (two years from now) of $40,000 and a 2nd year expense of $5,000
Operational or variable costs of $1,000 each year of the experiment
Benefits of the program include:
Hazardous waste to landfills at $8,000 each year of project
no illegal dumping of hazardous wastes of $6,000 each year
Educational experience of city staff and residents valued at $20,000 at the end of the experimental project
Calculate Net Present Value of project using 3% and 8% discount rate?
What are two costs and two benefits that are to be omitted?
Which cost or which benefit will have the greatest amount of uncertainty and why do you think so?
Cost Benefit Analysis Concepts and Practice
ISBN: 978-0137002696
4th edition
Authors: Anthony Boardman, David Greenberg, Aidan Vining, David Weimer