Calculate the conventional and the modified bc ratios

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Reference no: EM131112409

A transit project is being evaluated. This project is expected to cost $10M to construct and have a life of 30 years. The benefits associated with the project is $1.2M per year; however the disbenefits associated with the project is $300,000 in year 1 and will decrease by 8% each year. Maintenance and operation costs are $50,000 in the first year and will increase by $5,000 each year thereafter. Given a return on investment of 5%, calculate the conventional and the modified B/C ratios. Should the transit agency invest?

Reference no: EM131112409

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