The engineers at a design firm have been tapped by an amusement park to design a water sports ride. The construction of the ride costs P800,000 and will last 6 years. The maintenance of the ride will commence after a year of construction and will cost P17,000, increasing 11% per year thereafter. The interest is 8% annually. Determine: (a) Total present worth of the construction and maintenance cost (b) Construct the equivalent cash flow diagram
The engineers at a design firm have been tapped by an amusement park to design a water sports ride. The construction of the ride costs P800,000 and will last 6 years. The maintenance of the ride will commence after a year of construction and will cost P17,000, increasing 11% per year thereafter. The interest is 8% annually. Determine: (a) Total present worth of the construction and maintenance cost (b) Construct the equivalent cash flow diagram
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The engineers at a design firm have been tapped by an amusement park to design a water sports
ride. The construction of the ride costs P800,000 and will last 6 years. The maintenance of the ride
will commence after a year of construction and will cost P17,000, increasing 11% per year
thereafter. The interest is 8% annually. Determine:
(a) Total present worth of the construction and maintenance cost
(b) Construct the equivalent cash flow diagram
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