Question: 7.4 Construct the required CFD and calculate life-cycle cost (LCC) at an interest rate of 7% per year for a proposed project, where cost categories

7.4 Construct the required CFD and calculate life-cycle cost (LCC) at an interest rate of 7% per year for a proposed project, where cost categories (in millions) for the 20-year life cycle are indicated in the following table:

Cost in Each Year(s) in ($ Millions)
Cost Category 0 1 2 3 4 5 6 thru 10 11 thru 17 18 thru 20
Research & Development $ 5.50 $ 3.50 $ 2.50 $ 0.50
Proof of Concept $ 1.10
Prototype Development $ 5.20
Design for Manufacturing $10.50
Initial Production $ 10.50
Recurring Production Costs $ 1.30 $ 3.10 $ 4.20 $ 6.50 $ 2.20
Maintenance Costs $ 0.60 $ 1.40 $ 1.60 $ 2.70 $ 3.50
Equipment Costs $ 1.50 $ 3.60 $ 5.30 $ 7.80 $ 8.50
Disposal $

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!