The initial cost of constructing a flood control dam

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The initial cost of constructing a flood control dam is estimated to be $5 million, with annual upkeep costs of $499,526. Annual benefits (e.g., reduced flood damage, agricultural development, and tourism, etc.) are expected to be $1.25 million, whereas the disbenefits from significant ecological and human social changes are expected to be $0.025 million per year. Assume the dam will have a useful life of 50 years. At an interest rate of 10% per year, compute the conventional B-C ratio for this investment, with AW as the equivalent-worth measure.

Reference no: EM13816142

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