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Business, 15.02.2021 23:00 jaylalemieu9427

Flood damage to businesses and homes in Riverbend City averages five million dollars annually. A levee system costing fifty million dollars would prevent all flood damage. The annual maintenance and interest costs for the levee system would be three million dollars. Riverbend City could finance construction by selling bonds with a 20-year term that would pay 5% interest on par value. The market rate for similar bonds is 6%. Estimate the rate of return provided by the levee system.

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