1) The federal government is considering to build a parking lot on what used to
ID: 1168048 • Letter: 1
Question
1) The federal government is considering to build a parking lot on what used to be a forest.
These are the benefits and costs of the project:
Using the information above, what is the present value of the parking lot revenue assuming a 1% discount rate?
2) The federal government is considering to build a parking lot on what used to be a forest.
These are the benefits and costs of the project:
Using the information above, what is the present value of the total costs assuming a 27% discount rate?
3) The federal government is considering to build a parking lot on what used to be a forest.
These are the benefits and costs of the project:
Using the information above, what is the present value of the foregone recreation assuming a 26% discount rate?
Years 0 1 2 3 4 Costs Construction of parking lot 112 134 Foregone recreation 125 103 247 163 68 Benefits Parking lot revenue 59 94 240 245 Employment 133 94 282 68Explanation / Answer
1.
Years
0
1
2
3
4
Parking lot revenue
59
94
240
245
Discount rate (R) = 1%
Present value of parking lot revenue = CF1/(1+R) + CF2/(1+R)^2 + CF3/(1+R)^3 + CF4/(1+R)^4
Present value of parking lot revenue =59/1.1 + 94/1.1^2 + 240/1.1^3 + 245/1.1^4
Present value of parking lot revenue =478.98 approx.
Note : Pl. repost other unanswered questions to get their proper answers.
Years
0
1
2
3
4
Parking lot revenue
59
94
240
245
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