Department of public works also highways

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Reference no: EM1321308

Q. The Department of Public Works also Highways (DPWH) is considering the construction of a new highway through a scenic rural area. The road is expected to cost P50 million with yrly maintenance estimated at P400000. The improved accessibility is expected to result in additional income from tourist of P7 million per yr. The road is expected to have a useful life of 25 yrs. If the rate of interest is 15%, should the road be constructed? Conclude B/C ratio.

Reference no: EM1321308

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