Considering dredging a river to enable larger boats

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The city government is considering dredging a river to enable larger boats to use it. The estimated cost of the dredging is exist743, 500, with an annual maintenance cost of exist30,000 the first year increasing by 3.5% each year. The city believes the benefits of the dredging are exist73,000 the first year increasing by 4.7% per year. The project has a 20 year life and the city uses a 7.0% interest rate. Use benefit cost analysis to determine if the city should do this project?

Reference no: EM131585480

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