Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 42

A 473-foot, 7000-ton World War II troop carrier (once commissioned as the USS Excambion) was sunk in the Gulf of Mexico to serve as an under-water habitat and diving destination. The project took 10 years of planning and cost $4 million. Assume the $4 million was expended equally in years 1 through 10. What rate of return does the venture represent, if increased fishing and recreation activities are valued at $270,000 per year beginning in year 11 and they continue in perpetuity (If assigned by your instructor, show both hand and spreadsheet solutions.)