Calculate the capitalized cost of a project that has an initial cost of 3M and an additional investment cost of 1M at the end of every ten years. The annual operating cost will be 100T at the end of every year for the first four years and 160T thereafter. In addition, there is expected to be a recurring major rework cost of 300T every 13 years. Assume i = 15%.
Calculate the capitalized cost of a project that has an initial cost of 3M and an additional investment cost of 1M at the end of every ten years. The annual operating cost will be 100T at the end of every year for the first four years and 160T thereafter. In addition, there is expected to be a recurring major rework cost of 300T every 13 years. Assume i = 15%.
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
Problem 1PS
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Calculate the capitalized cost of a project that has an initial cost of 3M and an additional investment cost of 1M at the end of every ten years. The annual operating cost will be 100T at the end of every year for the first four years and 160T thereafter. In addition, there is expected to be a recurring major rework cost of 300T every 13 years. Assume i = 15%.
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