A municipal waste treatment plant with state-of-the-art environmental technology and controls is being installed by Forsythe County. The initial installation costs $8 million. Minor repairs and renovations are required after 6 years at a cost of $3 million; major repair, replacement, and renovations are required 4 years after the minor repairs and renovations at a cost of $7 million. The 10-year cycle of minor and major repairs/replacements/renovations repeats indefinitely. Annual O&M cost the first year is $1.0 million; during the 6- year period, operating and maintenance (O&M) cost increases at a rate of 4% per year. Annual O&M cost the first year following minor repairs/renovations is $1.5 million; during the 4-year period, O&M cost increases at a rate of $100,000 per year. The 10-year O&M cost cycles repeat indefinitely. Based on a 4% MARR, what is the capitalized cost for the waste treatment plant? Click here to access the TVM Factor Table calculator. tA Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±5,000.

A municipal waste treatment plant with state-of-the-art environmental technology and controls is being installed by Forsythe County. The initial installation costs $8 million. Minor repairs and renovations are required after 6 years at a cost of $3 million; major repair, replacement, and renovations are required 4 years after the minor repairs and renovations at a cost of $7 million. The 10-year cycle of minor and major repairs/replacements/renovations repeats indefinitely. Annual O&M cost the first year is $1.0 million; during the 6- year period, operating and maintenance (O&M) cost increases at a rate of 4% per year. Annual O&M cost the first year following minor repairs/renovations is $1.5 million; during the 4-year period, O&M cost increases at a rate of $100,000 per year. The 10-year O&M cost cycles repeat indefinitely. Based on a 4% MARR, what is the capitalized cost for the waste treatment plant? Click here to access the TVM Factor Table calculator. tA Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±5,000.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

M2.

A municipal waste treatment plant with state-of-the-art environmental technology and controls is being installed by Forsythe County.
The initial installation costs $8 million. Minor repairs and renovations are required after 6 years at a cost of $3 million; major repair,
replacement, and renovations are required 4 years after the minor repairs and renovations at a cost of $7 million. The 10-year cycle of
minor and major repairs/replacements/renovations repeats indefinitely. Annual O&M cost the first year is $1.0 million; during the 6-
year period, operating and maintenance (O&M) cost increases at a rate of 4% per year. Annual O&M cost the first year following minor
repairs/renovations is $1.5 million; during the 4-year period, O&M cost increases at a rate of $100,000 per year. The 10-year O&M
cost cycles repeat indefinitely. Based on a 4% MARR, what is the capitalized cost for the waste treatment plant?
Click here to access the TVM Factor Table calculator.
$
Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±5,000.

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QUESTION 4 Peter withdraws $5000 from his savings account. Then he deposits $4000 in his checking account and puts the remaining $1000 in a safe box in his house. What is the overall effect of these actions on M1 and M2? O A. M1 rises by $5000, M2 falls by $5000 O B. M1 is unchanged, M2 is unchanged O C. M1 rises by $5000, M2 is unchanged O D. M1 is unchanged, M2 falls by $5000
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