Question: The Adams Construction Company is bidding on a project to install a large flood drainage culvert from Dandridge to a distant lake. If they bid $2,000,000 for the job, what is the benefit-cost ratio in view of the following data? The MARR is 6% per year, and the project's life is 30 years.
Initial construction bid $2,000,000
Right of way maintenance $30,000 per year
Major upkeep every six years, starting at the present time $50,000
Annual benefit to the taxpayers $135,000