Brooke is evaluating two alternatives for improving the exterior appearance of her Victorian-style house that she is remodeling inside. She plans to keep this as her home for 20 more years. The house can be completely painted at a cost of $17,500. The paint is expected to remain attractive for 5 years, at which time repainting will be necessary. Every time the building is repainted (i.e., in years 5, 10, and 15), the cost will increase by 20% over the previous time. As an alternative, the exterior can be covered with a vintage-appearing vinyl-coated siding now and again 10 years from now at a cost 31% greater than the present cost
Brooke is evaluating two alternatives for improving the exterior appearance of her Victorian-style house that she is remodeling inside. She plans to keep this as her home for 20 more years. The house can be completely painted at a cost of $17,500. The paint is expected to remain attractive for 5 years, at which time repainting will be necessary. Every time the building is repainted (i.e., in years 5, 10, and 15), the cost will increase by 20% over the previous time.
As an alternative, the exterior can be covered with a vintage-appearing vinyl-coated siding now and again 10 years from now at a cost 31% greater than the present cost of the siding.
At a MARR of 10% per year, what is the maximum amount that Brooke should spend now on the siding alternative so that the two alternatives will just break even? Solve using factors.
The maximum amount that Brooke should spend now on the siding alternative is $
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