Proposal by the mayor to construct a recreational facility

Assignment Help Business Economics

Reference no: EM131096753

The Townsville City Council is considering a proposal by the mayor to construct a recreational facility at a cost of $1.0 million. The facility is expected to have a useful life of 30 years during which operating costs are expected to average $100,000 per year. It is anticipated that one-time renovations costing $500,000 will be carried out after 18 years. Overall benefits to the community are expected to average $220,000 per year. The facility will have no salvage value. Assuming an interest rate of 5% per year, determine the benefit-cost ratio for the proposed facility. Should the Council approve the proposal?

Reference no: EM131096753

Questions Cloud

Federal reserve tries to change inflationary expectations : At times, the Federal Reserve tries to change inflationary expectations. Why would the Fed want to raise inflationary expectations? How would this strategy of raising inflationary expectations affect consumption and investment? Be sure to tie your an..

What are your call options worth : Suppose you purchase eight call contracts on Macron Technology stock. The strike price is $65, and the premium is $2.3. If, at expiration, the stock is selling for $71 per share, what are your call options worth? What is your net profit? (Omit the "$..

What is the initial cost of the position : What is the initial cost of the position? What is the value of the position after 6 months? What is the implicit interest rate in these cash ?ows over 6 months?

In recessionary expenditure gap : In a recessionary expenditure gap, the equilibrium level of real GDP is: A. Less than planned aggregate expenditures B. Greater than planned aggregate expenditures C. Greater than full-employment GDP D. Less than full-employment GDP

Proposal by the mayor to construct a recreational facility : The Townsville City Council is considering a proposal by the mayor to construct a recreational facility at a cost of $1.0 million. The facility is expected to have a useful life of 30 years during which operating costs are expected to average $100,00..

What is absolute value of the price elasticity of demand : if a men's store sells 30 ties a day with a $5 price, but sold 50 ties per day when price dropped to $3, what's the absolute value of the price elasticity of demand? If a good has a price inelastic demand, what are the characteristics of this?

Do these criticisms seem valid to make of today america : Try a gendered/ feminist reading of 2 readings not mentioned in your Part 1 response. Describe what the writers seem to be saying about masculinity and/or femininity. Are these stereotypes/expectations still present in contemporary life?

The implicit function related to labor supply : Suppose you are given the implicit function related to labor supply: Use implicit differentiation to solve for the derivative: dN/dw. What is the value of this derivative when w = 10 and N = 5? Show all steps.

Based on the current events in our economy : Based on the current events in our economy, please keep this in mind. When interest rates are held more or less at a constant rate and price risk remains stable, financial leverage does not greatly impact changes is stock return at the market level. ..

User Account

All Pages