Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of$140,000. Annual maintenance expenses are expected to be $6,000 for the first 18 years and $9,000 for each year thereafter. The lighting will be needed for an indefinitely long period of time. With an interest rate of 9% per year, what is the capitalized cost of this project?
Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of$140,000. Annual maintenance expenses are expected to be $6,000 for the first 18 years and $9,000 for each year thereafter. The lighting will be needed for an indefinitely long period of time. With an interest rate of 9% per year, what is the capitalized cost of this project?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of$140,000. Annual maintenance expenses are expected to be $6,000 for the first 18 years and $9,000 for each year thereafter. The lighting will be needed for an indefinitely long period of time. With an interest rate of 9% per year, what is the capitalized cost of this project?
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