### Cost-benefit analysis

Assignment Help Accounting Basics
##### Reference no: EM13767

Create a cost-benefit analysis to evaluate the project:

The State of Massachusetts would like to replace a National Guard armory rapidly reaching the end of its service life. The Department of Military Affairs has been told that continued special maintenance would be \$275,000 annually. Rehabilitation of facility would cost \$4,000,000, and would extend the armory's service life by 15 years.

Calculate the discount factor for each year (use 4% discount rate @ 15 years)
Calculate the annual present value cost of maintenance (15 years)
Calculate the discounted benefit of rehabilitating the armory
Given the discounted cost of rehabilitation, what is the benefit/cost ratio for the proposal?

Be sure to include information regarding the following items when completing your evaluation of the project:

the objectives of the project
the demand and consumer surplus of the project
a categorization of the project expenses
an estimation of potential delays

In addition to fulfilling the specifics of the assignment, a successful paper must also meet the following criteria:

o Include an introductory and concluding paragraph and demonstrate college-level communication through the composition of original materials in Standard American English

o Use examples to support your discussion

o Cite all sources on a separate reference page at the end of your paper and cited within the body of your paper using APA format

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