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A local municipality is planning to convert some vacant acreage into a community park. The land has acted a a funnel for rain water resulting in the flooding of a major thoroughfare of the municipality. The estimated project benefits computed for 10-year periods for the 20 years are given in table below.

The annual benefits may be assumed to be one tenth of the benefits may be assumed to be one tenth of the decade benefits. The O&M cost of the project is estimated to be $5000 per year. Assume a 20 year analysis period with no net salvage value. If the interest rate is 5% is used and there is a B/C ratio of unity, determine step by step the present worth of the benefits for the first decade. Show work.

First Decade: 34000, 41000, 51000
Second Decade: 54000, 45000, 99000

Purpose Flood Control Recreation Total?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9981854

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