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Business, 04.07.2020 21:01 dorothybean

Suppose two different wetlands restoration programs are being considered. Each would provide benefits to people by restoring ducks and duck hunting to a region. The benefits would grow each year as more and more ducks return to the region. Both restoration programs would involve large initial costs, and small maintenance costs each year after that. The restoration efforts are expected to last 20 years. Plan 1 will cost $2,000 to construct. Benefits will be 650 in the first year of operation, and will rise by 350 per year. Operating costs will be 1,200 in the first year of operation, and will rise by 50 per year. Plan 2 will cost $3,800 to construct. Benefits will be 1,000 in the first year of operation, and will rise by 500 per year. Required:a. Using a 7.5 percent discount rate, what is the benefit/cost ratio of each of the plans (rounded to two decimal places)?b. According to the benefit-cost ratios, which plan is better?

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