Calculate the present value of the increased income

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Reference no: EM131840926

Problem

A workshop designed to retrain workers 55 years ofage and older who have lost their jobs is proposed.Suppose the workshop will increase the income ofeach participant by $1,000 per year for a period of10 years.

Calculate the present value of the increasedincome per participant with each of the followingdiscount rates: 0 percent, 1 percent, 3 percent,5 percent, and 10 percent. If the cost per participant is $8,000 and all thosecosts are incurred in the first year, at what discountrates will the benefit-cost ratio of the projectexceed 1?

Reference no: EM131840926

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