Gce Model Questions Vol1 2018 Economics Question 42
Practice objective / multiple choice question 42 from the 2018 Gce Model Questions Vol1 Economics examination.
A government plans to build a highway costing ₦500 million. The highway is expected to generate 2 million vehicle trips in the first year, growing at 3% per year for 10 years. Each trip yields a benefit of ₦30 in reduced travel time and fuel. The discount rate is 5% per annum. In addition, each year the highway imposes an external noise cost of ₦5 million, growing at 2% per year. Calculate the net present value (NPV) of the project and state whether it should be undertaken.
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About This Question
This is Gce Model Questions Vol1 2018 Economics Question 42. It is one of the objective questions from the 2018 Gce Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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