A Local Government Is Considering Promoting Tourism in the City

Essay

A local government is considering promoting tourism in the city. It will cost $5,000 to develop the plan. The
anticipated annual benefits and costs are as follows:
· Annual benefits: Increased local income and tax collections $117,400
· Annual support service: parking lot expansion, rest room, patrol car, and street repair $48,830
If the city government uses a discount rate of 6% and a study period of 5 years, is this tourism project justifiable
according to the benefit-cost analysis?