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8.7 US Airport Authority (USAA) is considering the construction of a new terminal at Gator Regional Airport. This pro to be permanent and has an
8.7 US Airport Authority (USAA) is considering the construction of a new terminal at Gator Regional Airport. This pro to be permanent and has an initial cost of $800 million with additional investment of $100 million every 10 years. No salvage value is expected. The revenues from the new terminal (benefits) are expected to be $150 million per year and disbenefits are estimated to be $4 million per year. Annual operating costs are $25 million per year. USAA uses a MARR of 12 percent. Using a conventional B/C ratio with AW values, determine whether or not this project is economically justified
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