A Chinese official is considering construction of a lift system that transports visitors from the tops...
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A Chinese official is considering construction of a lift system that transports visitors from the tops of the mountain peaks to the valley at the National Forest Parks in China. The lift system is expected to last for 45 years. Annual maintenance costs are expected to be $250,000. Moreover, inspection and repair costs of $40,000 every five years (up to year 40) are expected. Annual benefits are estimated to be $1,250,000. If an interest rate of 12% per year is used and a conventional B-C ratio of at least 1.X (using the PW method) is targeted, what is the maximum investment cost allowed for the lift system? A Chinese official is considering construction of a lift system that transports visitors from the tops of the mountain peaks to the valley at the National Forest Parks in China. The lift system is expected to last for 45 years. Annual maintenance costs are expected to be $250,000. Moreover, inspection and repair costs of $40,000 every five years (up to year 40) are expected. Annual benefits are estimated to be $1,250,000. If an interest rate of 12% per year is used and a conventional B-C ratio of at least 1.X (using the PW method) is targeted, what is the maximum investment cost allowed for the lift system?
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Answer The maximum investment cost allowed for the lift system can be determined using the PW Presen... View the full answer
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date:
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