Calculate the conventional and modi?ed bene?t cost ratios

Assignment Help Financial Management

Reference no: EM131307828

Calculate the conventional and modi?ed bene?t cost ratios for the following project.

Required ?rst costs = $1,200,000

Annual bene?ts to users = $500,000

Annual disbene?ts to users = $25,000

Annual cost to government = $125,000

Project life = 35 years

Interest rate = 10%

Reference no: EM131307828

Questions Cloud

Find the present value of the annuity : A thirty-year annuity has end-of-month payments. The first year the payments are each $120. In subsequent years each payment increases by $5 over what it was the previous year. Find the present value of the annuity if i = 3%.

Find total amount of liquidation from the two funds : Melanie receives an annuity paying $1,000 at the end of each month for eight years. This is directly deposited to a fund paying interest at an annual effective rate of 7.28%. Interest is paid out at the end of each year to a fund with an annual yield..

Plow back its earnings to fuel growth : Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next eight years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $12.75 per share 9 years..

Costs deluxe river cruises operates a fleet of river vessels : Minimizing Cruise Line Costs Deluxe River Cruises operates a fleet of river vessels. The fleet has two types of vessels: A type A vessel has 60 deluxe cabins and 160 standard cabins, whereas a type B vessel has 80 deluxe cabins and 120 standard cabin..

Calculate the conventional and modi?ed bene?t cost ratios : Calculate the conventional and modi?ed bene?t cost ratios for the following project.

Internal rate of return-payback period-profitability index : You are the executive officers of Big Buns, Inc. (BBI). BBI manufactures different types of chairs and accessories. You have had several good years and have decided to expand. BBI is looking at acquiring another company as a subsidiary. A 5 year proj..

What will be the range in tuition costs after ten years : Tuition costs at various colleges vary from $15,000 to $35,000 annually. These tuitions are expected to increase over time. If the annual rate of increase is 3 percent, what will be the new range in tuition costs in ten years? If the rate doubles fro..

Several problems related to price of inflation : Inflation is a general increase in prices and may be measured by the Consumer Price index (CPI). The following are several problems related to price of inflation? In 1984 the CPI was 100; 30 years later, it was 235. What was the annual rate of inflat..

Explain how do you estimate the amount of money : You are planning to buy a condominium in 3 years and estimate that you will need $30,000 for a down payment. If the interest rate you can earn at the bank is 4%, and you can save $5,000 today, $7,500 at the end of the first year, and $10,000 at the e..

User Account

All Pages