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The Department of Public Works and Highways (DPWH) is considering the construction of a new highway through a scenic rural area. The road is expected to cost P50 million with annual maintainance estimated at P400,000. The improved accessibility is expected to result in additional income from tourist of P7 million per year. The road is expected to have a useful life of 25 years. If the rate of interest is 15%, should the road be constructed? Determine B/C ratio.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M972841

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