A small flood control dam can be constructed for a cost of $3 million. The annual...

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A small flood control dam can be constructed for a cost of $3 million. The annual maintenance cost is expected to be $10,000 per year. The benefits from this dam are expected to be $300,000 per year while the dis-benefits are $100,000 per year. If the dam is expected to be permanent, find the benefit- to-cost ratio at an interest rate of 6% per year. A federal highway project is expected to have a first cost of $5 million and an annual maintenance cost of $200,000. Replacement costs of $1,000,000 will be required in 10 years. Benefits to the road- users are expected to be $800,000 per year, and there are no expected disbenefits. If the project will have a 20 year life, and the interest rate is 6% per year, should the government invest in this project? A small flood control dam can be constructed for a cost of $3 million. The annual maintenance cost is expected to be $10,000 per year. The benefits from this dam are expected to be $300,000 per year while the dis-benefits are $100,000 per year. If the dam is expected to be permanent, find the benefit- to-cost ratio at an interest rate of 6% per year. A federal highway project is expected to have a first cost of $5 million and an annual maintenance cost of $200,000. Replacement costs of $1,000,000 will be required in 10 years. Benefits to the road- users are expected to be $800,000 per year, and there are no expected disbenefits. If the project will have a 20 year life, and the interest rate is 6% per year, should the government invest in this project?

Answer rating: 100% (QA)

For the small flood control dam project we can use the benefittocost ratio BCR formula to determine ... View the full answer