Question: The cash flows associated with a Johnson County improvement project are as follows: Initial cost at t=0 $650,000 Benefits $190,000 per year Disbenefits $45,000 per
The cash flows associated with a Johnson County improvement project are as follows:
| Initial cost at t=0 | $650,000 |
| Benefits | $190,000 per year |
| Disbenefits | $45,000 per year |
| Maintenance costs | $35,000 every three years |
| Calibration cost | $100,000 at the end of year 2 (only once) |
| Salvage Value | $120,000 |
| Life | forever |
Determine the conventional B/C ratio at an interest rate of 9% per year.
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