Question

The benefits associated with a nuclear power plant cooling water filtration project located on the Ohio River are $10,000 per year forever starting in year 1. The costs are $50,000 in year 0 and $50,000 in year 2. What is the B/C ratio at i

Answer 1

1.1

Step-by-step explanation:

B/C ratio at i=10% per year?

Benefit= A/i%

Cost= initial cost- present worth

B/C= benefit/ cost

= [10,000/0.1]/[50,000 + 50000](p/f,10%,2)

= [100000/50000 + 50000(0.8264)]

= 1.1