The state of massachusetts would like to replace a national

Reference no: EM13389001

Use the net present value methodology when creating a cost-benefit analysis to evaluate the following 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

Calculate the annual present value cost of maintenance

Calculate the discounted benefit of rehabilitating the armory

Given the discounted cost of rehabilitation,what is the cost- benefit 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

Reference no: EM13389001

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