Question: During the feasibility study of a project, the initial estimated cost for design and construction is $9.9 million. It is anticipated that the cost to
During the feasibility study of a project, the initial estimated cost for design and construction is $9.9 million. It is anticipated that the cost to maintain and operate the facility after completion of construction will be $630,000 per year. Assuming the owner must obtain a return on the initial investment of 12%, what net annual income must be received to economically justify the project. Assume no salvage value after using the facility for 11 years.
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