Question: During the feasibility study of a project, the initial estimated cost for design and construction is $ 4 . 0 million with an expected operating

During the feasibility study of a project, the initial estimated cost for
design and construction is $4.0 million with an expected operating life of
20 years. It is anticipated that the cost to maintain and operate the facility
after completion of construction will be $30,000 per year. Assuming that
the owner must obtain a return on the initial investment of 12%, what net
annual income must be received to economically justify the project?

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