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New York City is evaluating the construction of a new train station to serve a new high - speed rail system. The Capital Projects Team

New York City is evaluating the construction of a new train station to serve a new high-speed rail system. The Capital Projects Team is responsible for evaluating whether the project is economically acceptable. The Capital Projects Team estimates that the new train station will generate $1B in annual revenue, and provide $1B a year in cost savings. The new train line will cannibalize some of the existing revenues the City receives from its current train system. The value of this cannibalization is estimated at $500MM a year. The new station's costs of Maintenance and Operation are anticipated to amount to be $250 MM per year. The initial investment required to design and build the train station is expected to be $15 B. New York City is considered to be a high credit and can borrow long-term in the capital markets at a rate of 6%. The Capital Projects Team evaluates these types of projects over a study period of 25 years. What is the Modified B/C Ratio?
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