A new office building has been constructed at a cost of $3,000,000. It is estimated to have a life of 50 years with a value at that time of $200,000. It will have maintenance costs of $10,000 per year. It will also have major repairs costing $80,000 that occur at years 10, 20, 30 and 40. It will have additional repairs at the end of year 25 costing $250,000. Determine the equivalent uniform annual cost if the rate of interest of the firm is 7%.

A new office building has been constructed at a cost of $3,000,000. It is estimated to have a life of 50 years with a value at that time of $200,000. It will have maintenance costs of $10,000 per year. It will also have major repairs costing $80,000 that occur at years 10, 20, 30 and 40. It will have additional repairs at the end of year 25 costing $250,000. Determine the equivalent uniform annual cost if the rate of interest of the firm is 7%.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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