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In: Economics

Amsterdam is considering spending $10 million to upgrade its dykes, which hold back sea at high...

Amsterdam is considering spending $10 million to upgrade its dykes, which hold back sea at high tide from flooding the city. The upgrades will last for 3 years, and the benefits in each of the three years will be $4 million.

The discount rate is 10%. According to a benefit-cost analysis, what is the Present Discounted Value of the project? State your answer to two decimal places, in terms of millions.

Solutions

Expert Solution

what is the Present Discounted Value of the project

=-10+4*(1-(1+10%)^(-3))/10%

=-0.05 million

Rahul Sunny answered 2 years ago
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