A project has an initial cost of $150,000. The annual operating cost is $8000 for the first 10 years and $5000 thereafter. There is a recurring $15000 maintenance cost each 15 years. The equation that represents the capitalized cost of this project at i=10% is: CW(10%) =150,000+8,000(P/A, 10 %, 10) + (5000/0.1) (P/F, 10%, 11)+( 15000 (A/F, 10 %, 15))/0.1 CW(10%) - 150,000+8,000(P/A, 10 %, 10)+(5000/0.1) (P/F, 10 %, 10 ) + ( 15000 (A/F, 10%, 15))/0.1 CW(10%) = 150,000+8,000(P/A, 10 %, 10) + (5000/0.1) (P/F, 10%, 11)+15000 (A/F, 10%, 15) CW(10%) - 150,000+8,000(P/A, 10 %, 10) +(5000/0.1) ( P/F, 10 % , 9 ) + ( 15000(A/F, 10%, 15))/0.1

A project has an initial cost of $150,000. The annual operating cost is $8000 for the first 10 years and $5000 thereafter. There is a recurring $15000 maintenance cost each 15 years. The equation that represents the capitalized cost of this project at i=10% is: CW(10%) =150,000+8,000(P/A, 10 %, 10) + (5000/0.1) (P/F, 10%, 11)+( 15000 (A/F, 10 %, 15))/0.1 CW(10%) - 150,000+8,000(P/A, 10 %, 10)+(5000/0.1) (P/F, 10 %, 10 ) + ( 15000 (A/F, 10%, 15))/0.1 CW(10%) = 150,000+8,000(P/A, 10 %, 10) + (5000/0.1) (P/F, 10%, 11)+15000 (A/F, 10%, 15) CW(10%) - 150,000+8,000(P/A, 10 %, 10) +(5000/0.1) ( P/F, 10 % , 9 ) + ( 15000(A/F, 10%, 15))/0.1

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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