Engineers determined that a small amount of newly available chemical additives would increase the resistance of a building material by 20%. The factory manager arranged the purchase of the additive through a 5-year contract at a price of $7,000 annually, with an interest of 15% to be installed annually, and an inflation of 10%, starting from one year from now. The annual price is expected to increase by $50 annually starting from the sixth year and thereafter until the year 13. In addition, an initial investment of $3,000 has been made to prepare a suitable site for the contractor to deliver the additive. Find the equivalent total present value of all these cash flows.
Engineers determined that a small amount of newly available chemical additives would increase the resistance of a building material by 20%. The factory manager arranged the purchase of the additive through a 5-year contract at a price of $7,000 annually, with an interest of 15% to be installed annually, and an inflation of 10%, starting from one year from now. The annual price is expected to increase by $50 annually starting from the sixth year and thereafter until the year 13. In addition, an initial investment of $3,000 has been made to prepare a suitable site for the contractor to deliver the additive. Find the equivalent total present value of all these cash flows.
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
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Engineers determined that a small amount of newly available chemical additives would increase the resistance of a building material by 20%. The factory manager arranged the purchase of the additive through a 5-year contract at a price of $7,000 annually, with an interest of 15% to be installed annually, and an inflation of 10%, starting from one year from now. The annual price is expected to increase by $50 annually starting from the sixth year and thereafter until the year 13. In addition, an initial investment of $3,000 has been made to prepare a suitable site for the contractor to deliver the additive. Find the equivalent total present value of all these cash flows.
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