Calculate the net present value and benefit cost ratio

Assignment Help Financial Management

Reference no: EM13834953

The parks department is considering building a new pool. If the project is approved, the pool will be constructed in 2016 for a total cost of $400,000 to be paid from the cash reserves of the department. The pool will open in 2017 and is expected to generate $97,000 in revenue each year. It will cost roughly $68,000 per year to operate. It is expected to last 20 years before it will require another major capital investment. Using a 3% discount rate, calculate the Net Present Value (NPV) and Benefit Cost Ratio (BCR) for the project over the next 21 years. Assume the construction costs occur at the end of year one and that all costs and benefits occur at the end of each year.

What is the NPV and BCR for the project?

Reference no: EM13834953

Questions Cloud

The appropriate capital budgeting decision rule : The appropriate capital budgeting decision rule is ____

Discuss ajzen theory of planned behavior : Discuss the differences between Ajzen's theory of planned behavior and Fazio's accessibility model. Explain which variable Ajzen added to the theory of reasoned behavior so it became the theory of planned behavior. Would adding this variable to..

Physical education and obesity levels in children : Read the article in this link http://www.signonsandiego.com/news/2011/oct/28/a-student-measurement-of-worry/ Write an essay in your own words discussing this article. It should be at least one page. Make sure to make 5 points that are relevant to the..

Prepare journal entries to record the transactions : Prepare journal entries to record the transactions completed in the year to 30 June, 2014 Post the entries to Accounts - Prepare and post the adjusting entries

Calculate the net present value and benefit cost ratio : The parks department is considering building a new pool. If the project is approved, the pool will be constructed in 2016 for a total cost of $400,000 to be paid from the cash reserves of the department. calculate the Net Present Value (NPV) and Bene..

How many instructions does the machine execute : Suppose a person is typing forty words per minute at a keyboard. (A word is considered to be five characters.) If a machine executes 500 instructions every microsecond (millionth of a second), how many instructions does the machine execute during the..

Exposed to high levels of polychlorinated benzene : therapeutic index (i.e. concentration in plasma at which drugs is inhibits major clot formation, but does not prevent basal levels of clotting in response to injury). In plasma, the drug is highly protein bound with 99% found bound to various serum p..

Relationship between yield to maturity and bond prices : Which of the following statements about the relationship between yield to maturity and bond prices is false?

Explain the characteristics of life along with examples : Explain the characteristics of life along with examples of each Describe types of passive and active transport and what kind of molecules use these transport mechanisms

User Account

All Pages