What is the benefit-to-cost ratio for the project

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Reference no: EM131965700

Problem

A public project is being considered by a local government that will cost $10M at the start and $8M at the end of years 1 through 5. The project is estimated to earn $20M at the end of year 2, $30M at the end of year 3 and 4, and $20M at the end of year 5. Assuming i =10%. What is the benefit-to-cost ratio for this project? Draw a cash flow diagram for the costs and benefits annually.

Reference no: EM131965700

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