A City Council Is Planning to Build a New Bridge

Multiple Choice

A city council is planning to build a new bridge across a creek. This will require an immediate expenditure of $50 000, and an estimated $2 000 a year in maintenance, but will save citizens an estimated $5 000 in travel costs every year over the next twenty years. If the council's MARR is 5%, what is the BCR for the project?

A) 0.83
B) 0.95
C) 1.20
D) 1.25
E) 2.5