The total cost of the improvements is estimated at 130


The total cost of the improvements is estimated at $130 million and will require annual maintenance of $1,000,000 per year, lasting for 40 years. The improved railbeds and crossings are expected to allow trains to pass through the stretch at an additional 20 miles per hour (up from 60 to 80). While the increased speed should not impact operating expenses, it is expected to boost revenues by $25 million per year due to improved delivery performance. If the railroad expects to earn 20% per year on investments, should it make the investment? Defend your answer.

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Financial Management: The total cost of the improvements is estimated at 130
Reference No:- TGS02735308

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