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Benefit Cost Ratio of a New Park

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A new park has been proposed in a downtown business district. To build the park, several businesses will have to be reallocated. This process will disrupt the business for about six months and cause a loss of income of approximately $100,000. The new park will cost about $1,200,000 to build and will cost about $50,000 annually for maintenance. The addition of the park will encourage the construction of apartments in the area with the net benefit valued at about $280,000 annually. Using a social discount rate of 9% and a period of analysis of 10 years, determine if this project has an acceptable benefit/cost ratio

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The expert examines the benefit cost ratios of a new park.

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