1). Initial Investment = $88 m distributed over 5 years; $4 million now and in year 5 and $20 m in each of years 1 through 4

2). Annual Cost: $1m per year, plus an additional $3m each fifth year, including year 30

3). Annual Review/Benefits: $2.25 m in year 1, increasing by a constant $0.5 m annually through year 10, and then increasing

by a constant $1m per year through year 20 and remain constant thereafter

4). Estimated disbenefits: 10m in year 1, decrease by $0.5 m per year through year 21, and remain zero thereafter

Discount Rate: 4%

Calculate:

B/C = (Benefits Disbenefits Annual Cost)/Investment cost

Hint:

Find PW of these 4 items.

PW of Investment = ? PW of Annual cost = ? PW of Disbenefit = ? PW of Benefit = ?

Please do this one through formulas and not excel. Thanks!