Question

a project costing P250,000 yields a yearly benefit of P80,000 for a period of 10 years with no salvage value at an interest rate of 6%. What is the benefit cost ratio

Answer #1

Cost benefit Ration = Discounted benefit of Project Benefit / Discounted value of Project Cost

Discounted Benefit of Project Benefit = Yearly Benefits * Present value value of 10 Year

80000 * {1 / ( 1+r) }n

80000 * (1 / 1.06 ) 10

80000 * 7.36

= 588800

Discount Benefit of Project Cost = Project Cost * Present value factor of 1 year

= 250000 * 1

= 250000

Cost Benefit Ration = 588800/250000 = 2.35

Cost Benefit Ration 2.35 : 1

It Means Every spending of 1 getting 2.35

. A project’s annual benefit is $50,000 and its service life is
10 years. If the initial construction cost is $300,000 what is the
minimum interest rate for which this project has a benefit-cost
ratio greater than 1.

16. A project yields an annual benefit of $250/year for ever. If
the rate of return is 8%, what is the present value? If it costs
$5000 should you proceed? If it were a public project how might
your answer change?

Diana usually uses a three-year payback period to determine if a
project is acceptable. A recent project with uniform yearly savings
over a five-year life had a payback period of almost exactly three
years, so Diana decided to find the project's present worth to help
determine if the project was truly justifiable. However, that
calculation didn't help either since the present worth was exactly
0. What interest rate was Diana using to calculate the present
worth? The project has no...

Preform a benefit/cost analysis on the following
project:
Expected costs: $5,000 today, $5,000 a year from today,
and $5,000 two years from today
Expected revenue: $6,000 five years from today, $7,000
seven years from today, and $8,000 ten years from
today.
Assume a 6% discount rate
The Net Present Value (NPV) of the project
The benefit/cost ratio
Is the project worth undertaking?

A parking structure that yields $3000 of benefit per year from
year 1 to year 9. The cost for this project is $10,000 year 0 and
$2,000 year 1. Calculate NPV using discount rate of 10%
A wastewater treatment plant that would yield $800 benefit per
year forever. The cost for this project is 7500 in year 0.
Calculate using NPV discount rate of 10%

Consider the following financial data:
Project A
Project B
Initial Cost
$11531
$18817
Annual Benefit
$1490
$4888
Annual Maintenance Costs
$629
$1703
Project Life
10 years
15 years
Using a MARR of 8%, what is the benefit-cost (B/C) ratio for
project A?

Project Phoenix costs $1.25 million and yields annual cost
savings of $200,000 for seven years. The assets involved in the
project can be salvaged for $100,000 at the end of the project.
Ignoring taxes, what is the payback period for Project Phoenix?

Consider the following financial data:
Project A
Project B
Initial Cost
$5422
$15179
Annual Benefit
$2331
$5694
Annual Maintenance Costs
$1092
$2372
Project Life
10 years
15 years
Using a MARR of 8%, what is the incremental benefit-cost (B/C)
ratio for projects A and B?

the benefit-cost ratio for a project with an initial outlay of
$9000 and net cash flows of %5000 p.a. for the next three years and
a required rate of return of %10 p.a. is:
A. $3434.
B. 0.3815
C. 1.21
D.1.3815

A project requires an investment of $180000, has no salvage
value, and a life of 7 years. Use MACRS depreciation and a tax rate
of 18%. What are the internal rate of return and discounted payback
period? The yearly cash flows are:
Income($) 150,250,350,450,500,650,500
Cash expenses($) 50,75,100,150,200,250,200
Is this project recommended?

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