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The City of Swimfield is building a new pool. The pool will cost $1.5 million to construct in year one. The pool will open in year two and will need another capital investment of $150,000 in year eleven. Annual revenues are estimated at $250,000 per year. Annual expenses are estimated at $125,000 per year.

a) All costs and benefits accrue at the end of each year. Using a 3.5% discount rate, calculate the NPV and BCR for the pool project over the next 21 years. What is the NPV for the pool?

b) What is the BCR for the pool? Round your answer to two decimal places.

Round your answer to the nearest whole dollar.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91794955

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