A city is faced with the following three options for a public project. Which if any of the three
should be chosen, based on a benefit-cost analysis using a 50-yr life and a 10% discount rate?
A B C
Capital investment $8,500,000 $10,000,000 $12,000,000
Annual oper. & maint. costs 750,000 725,000 700,000
Market value at end of life 1,250,000 1,750,000 2,000,000
Annual benefit 2,150,000 2,265,000 2,500,000