Consider an investment in a project having a first cost of $300,000, operating and maintenance costs...
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Consider an investment in a project having a first cost of $300,000, operating and maintenance costs of $45,000 per year, a profit of $65,000 per year, and an estimated disposal cost of $50,000 (toxic chemicals) at the end of 12 years. a. Assuming an interest rate of 6%, what is the present equivalent cost of the investment? b. Assuming an interest rate of 6%, what is the equivalent annual cost of the investment? c. Assuming an interest rate of 2%, what is the equivalent annual cost of the investment? Consider an investment in a project having a first cost of $300,000, operating and maintenance costs of $45,000 per year, a profit of $65,000 per year, and an estimated disposal cost of $50,000 (toxic chemicals) at the end of 12 years. a. Assuming an interest rate of 6%, what is the present equivalent cost of the investment? b. Assuming an interest rate of 6%, what is the equivalent annual cost of the investment? c. Assuming an interest rate of 2%, what is the equivalent annual cost of the investment?
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Managerial economics applications strategy and tactics
ISBN: 978-1439079232
12th Edition
Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris
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