A government organization has hired you to make a recommendation on the cost of a high-tech sports
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Question:
A government organization has hired you to make a recommendation on the cost of a high-tech sports complex that they are going to build. You estimate that the complex will cost $500m in today’s money. You also estimate that the complex will need renovation every 10 years at a cost of $10m. The annual repairs and maintenance are estimated to be $2m per year. For an interest rate of 8%, calculate:
a) The capitalized equivalent cost of the complex,
b) The dollar value of costs at the end of year 10 and year 20.
Expert Answer:
a Capitalised Cost Capitalised cost is the present value of all the future Costs The C... View the full answer
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