Neco Model Questions Vol1 2022 Economics Question 29
Practice objective / multiple choice question 29 from the 2022 Neco Model Questions Vol1 Economics examination.
A government plans to build a 100 km highway. Construction cost of \(\text{₦}2.5\) billion is incurred at the start. Annual maintenance cost will be \(\text{₦}120\) million for 20 years. The highway is expected to generate an annual economic benefit of \(\text{₦}300\) million in the first year, growing at 3 % per year. Using a discount rate of 8 % per annum, calculate the net present value (NPV) of the project (in billions of Naira, rounded to two decimal places) and state whether the project should be undertaken.
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About This Question
This is Neco Model Questions Vol1 2022 Economics Question 29. It is one of the objective questions from the 2022 Neco Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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