Use the net present value methodology when creating a cost-benefit analysis to evaluate the following project:

Dec 14th, 2015
Anonymous
Category:
Engineering
Price: $5 USD

Question description

Help Me Solve This Math Please.


Use the net present value methodology when creating a cost-benefit analysis to evaluate the following project:

The State of Massachusetts would like to replace a National Guard armory rapidly reaching the end of its service life.

The Department of Military Affairs has been told that continued special maintenance would be $275,000 annually.

Rehabilitation of facility would cost $4,000,000, and would extend the armory’s service life by 15 years.

1.Calculate the discount factor for each year (use 4% discount rate @ 15 years)

2.Calculate the annual present value cost of maintenance (15 years)

3.Calculate the discounted benefit of rehabilitating the armory

4.Given the discounted cost of rehabilitation, what is the cost- benefit ratio for the proposal?

Be sure to include information regarding the following items when completing your evaluation of the project:

the objectives of the project

the demand and consumer surplus of the project

a categorization of the project expenses

an estimation of potential delays


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