Equivalent annual net benet methods

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Reference no: EM13818022

Suppose the county government has the choice to invest in a public library or a basketball court. It can't invest in both. A public library is very expensive to build and maintain, but it will serve the county for 20 years. The present value of the net benets of the library is $ 20 million. The basketball court is relatively cheaper to construct and maintain, but it will serve the county for only 5 years. The present value of the net benets of the basketball court is $ 5 million. Suppose the discount rate is equal to 5%. Approach the problem using the Roll-Over and Equivalent Annual Net Benet methods.

Reference no: EM13818022

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