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A local government is considering promoting tourism in the city. It will cost $5,000 to develop a plan. The anticipated annual benefits and costs are
A local government is considering promoting tourism in the city. It will cost $5,000 to develop a plan. The anticipated annual benefits and costs are as follows: Annual benefits: Increased local income and tax collections: $117,400 Annual support service: Parking lot expansion, rest room, patrol car, and street repair: $48,830 If the city government uses a discount rate of 10% and a study period of five years, calculate the benefit-cost (BC) ratio and profitability index (Pl) and determine if this tourism project is justifiable according to the BC ratio and PI. A local government is considering promoting tourism in the city. It will cost $5,000 to develop a plan. The anticipated annual benefits and costs are as follows: Annual benefits: Increased local income and tax collections: $117,400 Annual support service: Parking lot expansion, rest room, patrol car, and street repair: $48,830 If the city government uses a discount rate of 10% and a study period of five years, calculate the benefit-cost (BC) ratio and profitability index (Pl) and determine if this tourism project is justifiable according to the BC ratio and PI
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