The Department of Defense is considering three sites in the National Wildlife Preserve for extrac- tion of rare metals. The cash flows associated with each site are summarized. The extraction period is limited to 5 years and the interest rate is 10% per year. Use the B/C method to determine which site, if any, is acceptable. The monetary unit is $ million. (Note: Problem 9.56 includes further analysis for this situation.) Site A B с Initial cost, $ Annual cost, $/year Annual benefits, $/year Annual disbenefits, $/year 0.5 55555 50 90 3 20 29 06 22 200 4 6 61 2.1
The Department of Defense is considering three sites in the National Wildlife Preserve for extrac- tion of rare metals. The cash flows associated with each site are summarized. The extraction period is limited to 5 years and the interest rate is 10% per year. Use the B/C method to determine which site, if any, is acceptable. The monetary unit is $ million. (Note: Problem 9.56 includes further analysis for this situation.) Site A B с Initial cost, $ Annual cost, $/year Annual benefits, $/year Annual disbenefits, $/year 0.5 55555 50 90 3 20 29 06 22 200 4 6 61 2.1
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 10P
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