An Army Corps of Engineers project for improving navigation on the Ohio River will have an initial cost of $6,500,000 and annual maintenance of $130,000. Benefits for barges and paddle wheel touring boats are estimated at $820,000 per year. The project is assumed to be permanent and the discount rate is 8% per year. Determine if theCorps should proceed with the project.

Principles of Accounting Volume 2
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Chapter11: Capital Budgeting Decisions
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An Army Corps of Engineers project for improving navigation on the
Ohio River will have an initial cost of $6,500,000 and annual
maintenance of $130,000. Benefits for barges and paddle wheel touring
boats are estimated at $820,000 per year. The project is assumed to be
permanent and the discount rate is 8% per year. Determine if theCorps
should proceed with the project.

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