Lakeside Marina is considering expanding its seasonal docking facilities. Construction would take place in year one, with costs of $145,000 paid at the start of the first year, and some additional landscaping costs of $3,500 paid at the start of the second year. The docks would have a useful life to the end of year 15, with no residual value. The increased capacity should generate increased annual profits of $15,000 at the end of years 2 through 5, and $20,000 at the end of years 6 through 15. If Lakeside’s cost of capital is 6% compounded annually, a) What is the NPV of the project?
Lakeside Marina is considering expanding its seasonal docking facilities. Construction would take place in year one, with costs of $145,000 paid at the start of the first year, and some additional landscaping costs of $3,500 paid at the start of the second year. The docks would have a useful life to the end of year 15, with no residual value. The increased capacity should generate increased annual profits of $15,000 at the end of years 2 through 5, and $20,000 at the end of years 6 through 15. If Lakeside’s cost of capital is 6% compounded annually, a) What is the NPV of the project?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Lakeside Marina is considering expanding its seasonal docking facilities. Construction would take place in year one, with costs of $145,000 paid at the start of the first year, and some additional landscaping costs of $3,500 paid at the start of the second year. The docks would have a useful life to the end of year 15, with no residual value. The increased capacity should generate increased annual profits of $15,000 at the end of years 2 through 5, and $20,000 at the end of years 6 through 15. If Lakeside’s cost of capital is 6% compounded annually,
a) What is the NPV of the project?
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