A city government is considering increasing the capacity of the current waste water treatment plant. Th estimated financial data for the project are as follows: Calculate the benefit-cost ratio for this capacity expansion.

a. Calculate B, I and C

b. Calculate BC Ratio

Description Data Capital Investment $1,000,000 Project Life 20 Years Incremental Annual Benefits $220,000 Incremental Annual Costs $80,000 Salvage Value $40,000 Discount Rate 5%