Financial information about a dam project is presented in the table below. Initial investment cost ($) 340,000 Operation-maintenance expenses (annual) ($) 57,000 High repair-maintenance cost (at 10th year) ($) 411,000 Salvage value ($) 44,000 Economic life of the dam 25 years Annual interest rate 15% The kilowatt hour (kWh) of electricity will be sold at $0.45. Under these conditions, how much electricity should the dam produce annually to cover the construction costs?
Financial information about a dam project is presented in the table below. Initial investment cost ($) 340,000 Operation-maintenance expenses (annual) ($) 57,000 High repair-maintenance cost (at 10th year) ($) 411,000 Salvage value ($) 44,000 Economic life of the dam 25 years Annual interest rate 15% The kilowatt hour (kWh) of electricity will be sold at $0.45. Under these conditions, how much electricity should the dam produce annually to cover the construction costs?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Financial information about a dam project is presented in the table below.
Initial investment cost ($) | 340,000 | Operation-maintenance expenses (annual) ($) | 57,000 |
High repair-maintenance cost (at 10th year) ($) | 411,000 | Salvage value ($) | 44,000 |
Economic life of the dam | 25 years | Annual interest rate | 15% |
The kilowatt hour (kWh) of electricity will be sold at $0.45. Under these conditions, how much electricity should the dam produce annually to cover the construction costs?
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