Answer to Question #87424 in Finance for Alex

Question #87424
A bridge will cost (in the present) $280 million to build, will be completed by next year, and will start producing the benefits next year, $8 million per year. It will cost $1 million a year to maintain (starting next year, too). It is expected that the bridge will last for a long time. The market interest rate is 5%. Approximate (with the formula for perpetuity) the present value of the bridge project (including the cost of construction, benefits, and the cost of maintenance).
1
Expert's answer
2019-04-03T09:05:46-0400

Using the formula for perpetuity:


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