Compare the two projects of different life spans

Assignment Help Business Economics
Reference no: EM132587566

A county is considering using a piece of park land for one of two alternative projects. Project A would require construction costs of $180,000 (year 0) and generate net benefits of $35,000 per year for 8 years. (The benefits are realized at the ends of years 1 through 8). Project B would require construction costs of $2.25 million and generate net benefits of $150,000 per year for 24 years. (The benefits are realized at the ends of years 1 through 24). Each project is assumed to have zero salvage value at the end of its life. If these figures are in real dollars, and the real discount rate is 6 percent, which project would the county select? Show your calculations - you can upload your Excel calculations. (You will have to calculate the NPV of each project then use the EANB or Roll-over method to compare the two projects of different life spans).

Reference no: EM132587566

Questions Cloud

Define globalization and explain its various characteristics : Define Globalization and explain its various characteristics. As business managers, determine whether you are 'pro-globalization'
Explain the importance of small and medium size : Explain the importance of small and medium size enterprises to the economies in the Caribbean. Discuss and provide reference.
Perspective of public-sector correctional administrator : From the perspective of a public-sector correctional administrator, make 2 arguments for keeping the jails in public hands.
Calculate the four-firm concentration ratio : Suppose each of the 50 states in the United States had only one gasoline station, and all stations were the same size (sales were the same in each gas station).
Compare the two projects of different life spans : A county is considering using a piece of park land for one of two alternative projects. Project A would require construction costs
Define crime prevention through environmental design : Define Crime Prevention Through Environmental Design (CPTED). Identify a location in your city that effectively uses CPTED and a location that does not.
Short run expression for the is curve : What is the new, short run (fixed price level) expression for the IS curve? Please show all work.
Make an income statement for Splish Brothers Inc : Splish Brothers Inc. began operations on January 1, 2017. Make an income statement for Splish Brothers Inc. Make a retained earnings statement
How your policy change would improve the organization : Identify a policy in your organization that you think could be created or amended to improve organizational governance, operations,

Reviews

Write a Review

Business Economics Questions & Answers

  Calculate the optimal money growth rate needed for the fed

Suppose that people expect the Fed to hit its inflation target. A: Calculate the optimal money growth rate needed for the Fed to hit its inflation target in the long run.

  Suppose the growth rate of the firms profit

Suppose the growth rate of the firm's profit is 5 percent, the interest rate is 6 percent, and the current profits of the firm are $80 million. What is the value of the firm?

  Orecasters predictions inflation are notoriously inaccurate

Forecasters predictions of inflation are notoriously inaccurate, so their expectations of inflation cannot be rational.

  What qualities make a future issue trigger

Due to the changing environment and external triggers, contingency planning is necessary. What qualities make a future issue a trigger? Consider you are on the strategic planning team for a soft drink company. Here is your company’s future trigger: m..

  Implementation and the problems encountered

Please include the benefits derived from such an implementation and the problems encountered.

  Government should take to maintain a stable currency

Discuss actions that a government should take to maintain a stable currency. What actions will undermine a currency?

  Expected returns-what is the required value

A project is being considered that will cost $17000. Expected returns are $3000 at the end of the years 1 and 2, and $X at the end of years 3 and 4,$3000 at the end of the years 5 and 6,$X at the end of the years 7 and 8, with this pattern repeating ..

  Describe the effect you have on this process when you visit

Discuss and describe the effect you have on this process when you visit the ATM to get some cash to pay for your late-night pizza.

  Real interest rate is combination of inflation rate

Real interest rate is a combination of inflation rate and market interest rate, and increase when those rates increase. To have a higher NPV of an after-tax CFS, business owners would always prefer lower depreciation rates.

  Discuss some of principal historical developments in origins

Discuss some of the principal historical developments in the origins and evolution of white collar crime law. Which factors promoted and which factors hindered the development of white collar crime law in the United States? How does the dialectical p..

  Fiscal contraction under fixed and flexible exchange rates

Explain the impact of fiscal contraction under fixed and flexible exchange rates, using relevant diagrams. Assume the economy is in equilibrium to begin with.

  Make the fullest possible use of their abilities

make the fullest possible use of their abilities. Support your paper with at least two articles from the Library. Your paper must be APA compliant.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd