Develop an Excel spread sheet for the following problem. Calculate the Present Value Net Benefits (PVNB), the Benefit-to-Cost and Savings-to-Investment Ratios (BCR and SIR). State whether the project is economic or not.
N.B: consider all benefits, profits …etc to be positive and all costs, investments …etc to be negative.
Building first costs (design, planning and construction) = $10,000,000
- Initial cost for roadway and parking facilities = $5,500,000
- First cost to equip and furnish facility = $500,000
- Annual operating and maintenance costs = $350,000
- Annual savings from rented space = $500,000
- Annual benefits to community = 1,500,000
- Project life = 50 years
- Interest rate = 12%