Is the public project worth undertaking

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Reference no: EM131934696

A federal highway project is expected to have a first cost of $5 million and an annual maintenance cost of $200,000. Shoulder replacement costs of $1,000,000 will be required in 10 years. Benefits to the road-users are expected to be $800,000 per year. If the project will have a 20 year life, please calculate the modified B/C ratio. Is the public project worth undertaking? Why (not)?

Reference no: EM131934696

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