Program to improve a ferry system

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Reference no: EM131553939

A program to improve a ferry system by adding new technology has much promise. The new system will cost $5 million with an annual operating cost of $900,000 over the 30 year anticipated lifetime. The benefits are expected to be $2.0 million the first year of operation and grow at a constant rate of 2 % per year. The municipal government who runs the ferry uses a 5% discount rate to evaluate its new systems. Compute the net present value.

Reference no: EM131553939

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