1. You are consultant with sunset limited and you have been given data on a proposed project as follows:

• The project requires a capital outlay of $1,200,000
• The economic life of the project is 4 years
• The annual maintenance cost forms the 2^nd to 4^th is $100,000
• The cost yields and annual return of $250,000
• The cost of capital is 10%

Required

1. Determine the benefit-cost ratio of the project
2. What can you say about the profitability and economic viability of the project?