To decrease the costs of operating a lock in a large river, a new system of operation is proposed. The system will cost $830,000 to design and build. It is estimated that it will have to be reworked every 10 years at a co $120,000. In addition, an expenditure of $80,000 will have to be made at the end of the fifth year for a new type of gear that will not be available until then. Annual operating costs are expected to be $70,000 for the firs years and $100.000 a year thereafter. Compute the capitalized cost of perpetual service at i = 7%. Click the icon to view the interest factors for discrete compounding when ;=7% per year. More Info The capitalized cost of perpetual service is $ million. (Round to three decimal places.) Single Payment Compound Present Amount Equal Payment Series Sinking Present Fund Factor Capital Recovery Worth Worth Compound Amount Factor (F/A, i, N) Factor Factor Factor Factor (F/P, i, N) (P/F, i, N) (A/F, i, N) (P/A, i, N) (A/P, i, N) 1.0700 0.9346 1.0000 1.0000 0.9346 1.0700 1.1449 0.8734 2.0700 0.4831 1.8080 0.5531 1.2250 0.8163 3.2149 0.3111 2.6243 0.3811 1.3108 0.7629 4.4399 0.2252 3.3872 0.2952 1.4026 0.7130 5.7507 0.1739 4.1002 0.2439 1.5007 0.6663 7.1533 0.1398 4.7665 0.2098 1.6058 0.6227 8.6540 0.1156 5.3893 0.1856 1.7182 0.5820 10.2508 0.0975 5.9713 0.1675 1.8385 0.5430 11.9780 0.0835 6.5152 0.1535 1.9672 0.5083 13.8164 0.0724 7.0236 0.1424 2.1049 0.4751 15.7836 0.0634 7.4987 0.1334 ZIN346 2 5 7749 10 11
To decrease the costs of operating a lock in a large river, a new system of operation is proposed. The system will cost $830,000 to design and build. It is estimated that it will have to be reworked every 10 years at a co $120,000. In addition, an expenditure of $80,000 will have to be made at the end of the fifth year for a new type of gear that will not be available until then. Annual operating costs are expected to be $70,000 for the firs years and $100.000 a year thereafter. Compute the capitalized cost of perpetual service at i = 7%. Click the icon to view the interest factors for discrete compounding when ;=7% per year. More Info The capitalized cost of perpetual service is $ million. (Round to three decimal places.) Single Payment Compound Present Amount Equal Payment Series Sinking Present Fund Factor Capital Recovery Worth Worth Compound Amount Factor (F/A, i, N) Factor Factor Factor Factor (F/P, i, N) (P/F, i, N) (A/F, i, N) (P/A, i, N) (A/P, i, N) 1.0700 0.9346 1.0000 1.0000 0.9346 1.0700 1.1449 0.8734 2.0700 0.4831 1.8080 0.5531 1.2250 0.8163 3.2149 0.3111 2.6243 0.3811 1.3108 0.7629 4.4399 0.2252 3.3872 0.2952 1.4026 0.7130 5.7507 0.1739 4.1002 0.2439 1.5007 0.6663 7.1533 0.1398 4.7665 0.2098 1.6058 0.6227 8.6540 0.1156 5.3893 0.1856 1.7182 0.5820 10.2508 0.0975 5.9713 0.1675 1.8385 0.5430 11.9780 0.0835 6.5152 0.1535 1.9672 0.5083 13.8164 0.0724 7.0236 0.1424 2.1049 0.4751 15.7836 0.0634 7.4987 0.1334 ZIN346 2 5 7749 10 11
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:To decrease the costs of operating a lock in a large river, a new system of operation is proposed. The system will cost $830,000 to design and build. It is estimated that it will have to be reworked every 10 years at a cost of
$120,000. In addition, an expenditure of $80,000 will have to be made at the end of the fifth year for a new type of gear that will not be available until then. Annual operating costs are expected to be $70,000 for the first 15
years and $100,000 a year thereafter. Compute the capitalized cost of perpetual service at i= 7%.
Click the icon to view the interest factors for discrete compounding when i=7% per year.
- X
More Info
The capitalized cost of perpetual service is $ million. (Round to three decimal places.)
Single Payment
Compound
Amount
Factor
(F/P, i, N)
1.0700
Present
Worth
Factor
Compound
Amount
Factor
(F/A, i, N)
Equal Payment Series
Sinking Present
Fund
Worth
Factor
Factor
(A/F, i, N)
1.0000
0.4831
N
(P/F, i, N)
(P/A, i, N)
0.9346
1
0.9346
1.0000
2
1.1449
0.8734
2.0700
1.8080
3
1.2250
0.8163
3.2149
0.3111
2.6243
4
1.3108
0.7629
4.4399
0.2252
3.3872
5
1.4026
0.7130
5.7507
0.1739
4.1002
6
1.5007
0.6663
7.1533
0.1398
4.7665
7
8.6540
0.1156
5.3893
8
1.6058
1.7182
1.8385
10.2598
0.0975
5.9713
0.6227
0.5820
0.5439
0.5083
11.9780
0.0835
6.5152
10
1.9672
13.8164
0.0724
7.0238
11
2.1049
0.4751
15.7836
0.0834
7.4987
12
2.2522
0.4440
17.8885
0.0559
7.9427
13
2.4098
0.4150
20.1406
0.0497
8.3577
14
2.5785
0.3878
22.5505
0.0443
8.7455
15
2.7590
0.3624
25.1290
0.0398
9.1079
16
2.9522
0.3387
27.8881
0.0359
9.4488
17
3.1588
0.3166
30.8402
0.0324
9.7632
18
0.2959
33.9990
0.0294
10.0591
3.3799
3.6165
0.2765
37.3790
0.0268
10.3356
19
20
3.8697
0.2584
40.9955
0.0244
10.5940
Capital
Recovery
Factor
(A/P, i, N)
1.0700
0.5531
0.3811
0.2952
0.2439
0.2098
0.1856
0.1675
0.1535
0.1424
0.1334
0.1259
0.1197
0.1143
0.1098
0.1059
0.1024
0.0994
0.0968
0.0944
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