Assume an interest rate of 8% and a perpetual life

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A new airport expansion will cost $85 million. The largest amount, $55 million, is for land acquisition and major earthworks, which will last as long as the airport is used. The next $20 million is for terminal buildings, which will last 50 years; these buildings will cost $2.5 million per year in O&M. The last $10 million will be spent on runways. These will also last forever, with a major repaving every 20 years at a cost of $4 million. What annual benefit is required for B/C ≥ 1? Assume an interest rate of 8% and a perpetual life.

Reference no: EM131810205

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