A new solid waste treatment plant is to be constructed in Washington County. The initial installation will cost $30 million (M). After 10 years, minor repair and renovation (R&R) will occur at a cost of $14M will be required; after 20 years, a major R&R costing $18M will be required. The investment pattern will repeat every 20 years. Each year during the 20-year period, operating and maintenance (O&M) costs will occur. The first year, O&M costs will total $3M. Thereafter, O&M costs will increase at a compound rate of 6% per year. Based on a 6% MARR, what is the capitalized cost for the solid waste treatment plant? Click here to access the TVM Factor Table calculator.
A new solid waste treatment plant is to be constructed in Washington County. The initial installation will cost $30 million (M). After 10 years, minor repair and renovation (R&R) will occur at a cost of $14M will be required; after 20 years, a major R&R costing $18M will be required. The investment pattern will repeat every 20 years. Each year during the 20-year period, operating and maintenance (O&M) costs will occur. The first year, O&M costs will total $3M. Thereafter, O&M costs will increase at a compound rate of 6% per year. Based on a 6% MARR, what is the capitalized cost for the solid waste treatment plant? Click here to access the TVM Factor Table calculator.
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 new solid waste treatment plant is to be constructed in Washington County. The initial installation will cost $30 million (M). After 10
years, minor repair and renovation (R&R) will occur at a cost of $14M will be required; after 20 years, a major R&R costing $18M will be
required. The investment pattern will repeat every 20 years. Each year during the 20-year period, operating and maintenance (O&M)
costs will occur. The first year, O&M costs will total $3M. Thereafter, O&M costs will increase at a compound rate of 6% per year. Based
on a 6% MARR, what is the capitalized cost for the solid waste treatment plant?
Click here to access the TVM Factor Table calculator.
$
48411171
Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±25,000.
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