You are considering building waste treatment plan.
The project lasts 40 years and occurs construction
costs of $100 (all numbers are in millions of $). Annual operation cost is $8, and annual operation
benefit is $15. Assume constant interest rest of 4.5%
a)
Using annuity formula compute annuity factor, PV of
benefits, PV of costs, NPV of the project.
b)
(Sensitivity analysis) What is the minimum annual benefit needed to keep the project desirable?
(NPV>0)
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