Homework Answers
PW of all costs = 56000000 + 300000 * (P/A,10%,50) + 5000000 * ((P/F,10%,10) + (P/F,10%,20) + (P/F,10%,30) + (P/F,10%,40))
= 56000000 + 300000 *9.914814 + 5000000 * (0.385543 +0.148644 +0.057309 +0.022095)
= 6204399.20
PW of all benefits = 1800000 * (P/A,10%,50)
= 1800000 *9.914814
= 17846665.20
B/C ratio = PW of all benefits / PW of all costs
= 17846665.20 / 6204399.20
= 0.29
As B/C is less than 1, investment is not justified
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