What is the pw for each scenario

Assignment Help Microeconomics

Reference no: EM131806821

Question: A new 2-lane road is needed in a part of town that is growing. At some point the road will need 4-lanes to handle the anticipated traffic. If the city's optimistic estimate of growth is used, the expansion will be needed in 4 years. For the most likely and pessimistic estimates, the expansion will be neededin 8 and 15 years, respectively. The expansion will cost $4.2 million. Use an interest rate of 8%.

(a) What is the PW for each scenario, and what is the range of values?

(b ) Use Equation 10-1 to find the mean value of the expansion's PW Probabilities.

Reference no: EM131806821

Questions Cloud

What is the present worth for each estimated value : A new engineer is evaluating whether to use a higher-voltage transmission line. It will cost $250,000 more initially, but it will reduce transmission losses.

Distinguish between teamthink and groupthink : Distinguish between a group and a team. Distinguish between Teamthink and Groupthink ( in the Manz & Neck article), and identify benefits and drawbacks.

What rate of return did bill receive : The new owner assumed the balance of the loan on the lot and paid Bill $2500. What rate of return did Bill receive on his investment?

Discuss adjustments is needed in relation : Chancellor Limited provided a loan of $1 500 000 to its subsidiary Park Limited. On consolidation

What is the pw for each scenario : A new 2-lane road is needed in a part of town that is growing. At some point the road will need 4-lanes to handle the anticipated traffic.

Investment in xla corporation : On December 31, 2007, the investor sold the stock for $1740, terminating his 5-year investment in XLA Corporation. What rate of return did he receive?

What is the amount of research and development costs : What is the amount of research and development costs that Austin Powers should record in 2009 as a charge to expense

Determining the hurdle or discount rate for projects : Over the last 10 years, the hurdle or discount rate for projects from the firm's research and development division has been 10% twice, 15% three times.

Discuss the cash account after the reconciliation entries : What is the balance in the Cash account after the reconciliation entries

User Account

All Pages