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A Maryland town is considering whether or not to build a new waste treatment facility. Construction costs (incurred immediately) would be $100 million, and the
A Maryland town is considering whether or not to build a new waste treatment facility. Construction costs (incurred immediately) would be $100 million, and the plant would have an annual operating cost of $8 million, with a lifetime of 40 years. If the interest rate is 4.5%, what is the minimum annual benefit that would generate a positive net present value for the plant?
Useful formulas:
PV = NB*
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