An institution plans to invest $1.5 million to support research on new methods of teaching. The project which has a lifetime of 15 years can save the cost of salary, student fees and other university...

An institution plans to invest $1.5 million to support research on new methods of teaching. The project which has a lifetime of 15 years can save the cost of salary, student fees and other university fees worth $ 500,000 per year. Since the research activities are done at the same time as other research, the allocation for other research activities is reduced by $ 200,000 per year. The project requires an operating cost of $ 50,000 per year. At MARR of 6% per annum, determine (i) conventional B/C (ii) modified B/C ratio analysis for this project to assess the fairness of this financing program within 15 years.