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A coal-fired power plant has upgraded an emission control valve. The modification costs only $10,000 and is expected to last 6 years. The maintenance cost is expected to be high at $1000 the first year, increasing by 11% per year thereafter. Determine the equivalent present worth of the modification and maintenance cost by hand at 8% per year.

A coal-fired power plant has upgraded an emission control valve. The modification costs only $10,000 and is expected to last 6 years. The maintenance cost is expected to be high at $1000 the first year, increasing by 11% per year thereafter. Determine the equivalent present worth of the modification and maintenance cost by hand at 8% per year.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A coal-fired power plant has upgraded an emission control valve. The modification costs only $10,000 and is expected to last 6 years. The maintenance cost is expected to be high at $1000 the first year, increasing by 11% per year thereafter. Determine the equivalent present worth of the modification and maintenance cost by hand at 8% per year. OTotal 10 $ 1K $ 1K(1.11) $ 1K(1.11)? $ 1K(1.11)3 $ 10K $ 1K(1.11)4 $ 1K(1.11)5 Answer: w = Blank 1 : show in four decimal POTotal = $ Blank 2 F6Total / PoTotal = $ Blank 3 A/ POTotal = $ Blank 4
Transcribed Image Text:A coal-fired power plant has upgraded an emission control valve. The modification costs only $10,000 and is expected to last 6 years. The maintenance cost is expected to be high at $1000 the first year, increasing by 11% per year thereafter. Determine the equivalent present worth of the modification and maintenance cost by hand at 8% per year. OTotal 10 $ 1K $ 1K(1.11) $ 1K(1.11)? $ 1K(1.11)3 $ 10K $ 1K(1.11)4 $ 1K(1.11)5 Answer: w = Blank 1 : show in four decimal POTotal = $ Blank 2 F6Total / PoTotal = $ Blank 3 A/ POTotal = $ Blank 4
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