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The cost of doing improvements on a short rural road is expected to be $300,000. The road will have to be maintained at a cost of $25,000 per year.

The cost of doing improvements on a short rural road is expected to be $300,000. The road will have to be maintained at a cost of $25,000 per year. Even though the improved road will not be very smooth, it will allow access to an area that previously could only be reached with off-road vehicles. The improved accessibility should result in a 150% increase in the property values along the road. If the current market value of a property is $900,000, the project B/C ratio using an interest rate of 6% per year and a 20-year study period is closest to:


a.0.65

b.1.53

c.1.30

d.0.77

Top Answer

value of property increased to $1350,000 net profit =$450,000 net cost... View the full answer

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