Complete solutions +Questions:1. A water supply dam will cost $7 million to build and it will have erosioncontrol costs of $800,000 every 5 years forever. At an interest rate of 10%per year, what is the capitalized cost of the dam?2. A small flood control project has a capital investment cost of $300,000 andan annual maintenance cost of $80,000 at 10% per year in 5 years. What isthe capitalize cost?

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Answered: 1. A water supply dam will cost $7…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

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