PROBLEM-4: $200 million will be paid initially for a highway leased for 40 years. The highway will be serviced for $2.5 million each year (excluding years of maintenance of 5 million and 10 million), with $5 million of maintenance to be done every 5 years (excluding years of investment of 10 million). $10 million in renovations will be made every 10 years. When the deal is over, the company will be reimbursed $50 million. Ifi= 5%, what would be the equivalent of the money spent on this agreement at the end of the fairy od? FW= -1501 million dollars ¤ FW=-$1078 million FW=-2234 million dollars FW=-1764 million dollars FW= -3124 million dollars
PROBLEM-4: $200 million will be paid initially for a highway leased for 40 years. The highway will be serviced for $2.5 million each year (excluding years of maintenance of 5 million and 10 million), with $5 million of maintenance to be done every 5 years (excluding years of investment of 10 million). $10 million in renovations will be made every 10 years. When the deal is over, the company will be reimbursed $50 million. Ifi= 5%, what would be the equivalent of the money spent on this agreement at the end of the fairy od? FW= -1501 million dollars ¤ FW=-$1078 million FW=-2234 million dollars FW=-1764 million dollars FW= -3124 million dollars
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Don't just show the right options. Show all transactions clearly. Non-transactional questions will be considered incorrect.
![PROBLEM-4: $200 million will be paid initially for a highway leased for 40 years. The highway will be serviced
for $2.5 million each year (excluding years of maintenance of 5 million and 10 million), with $5 million of
maintenance to be done every 5 years (excluding years of investment of 10 million). $10 million in renovations will
be made every 10 years. When the deal is over, the company will be reimbursed $50 million. Ifi= 5%, what would
be the equivalent of the money spent on this agreement at the end of the fairy od?
I FW=-1501 million dollars
a FW=-$1078 million
I FW= -2234 million dollars
O FW=-1764 million dollars
O FW=-3124 million dollars](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F24f10b68-6674-4c5e-96f7-c3e740ed3dc3%2F40b80351-e672-4509-af2d-cfdbee33a84f%2Facuvg7i_processed.png&w=3840&q=75)
Transcribed Image Text:PROBLEM-4: $200 million will be paid initially for a highway leased for 40 years. The highway will be serviced
for $2.5 million each year (excluding years of maintenance of 5 million and 10 million), with $5 million of
maintenance to be done every 5 years (excluding years of investment of 10 million). $10 million in renovations will
be made every 10 years. When the deal is over, the company will be reimbursed $50 million. Ifi= 5%, what would
be the equivalent of the money spent on this agreement at the end of the fairy od?
I FW=-1501 million dollars
a FW=-$1078 million
I FW= -2234 million dollars
O FW=-1764 million dollars
O FW=-3124 million dollars
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