For a project being considered by a city, the following cost data is available. (a) Determine both the modified and conventional B/C ratios and offer a recommendation, and (b) if you are concerned because the data is not capturing the effects of Estimated annual disbenefits, how large would these have to be in order for you to change your recommendation (if at all) using the conventional B/C ratio?

Initial cost = $4 million

O & M cost / year = $450,000

Estimated annual benefits = $850,000

Life = 25 Years

Salvage value = $1 million

MARR = 6%