Question: For Questions 1 and 2: Two public projects are being considered. The first project has a construction cost of SR 1,500,000. The operating cost is
For Questions 1 and 2: Two public projects are being considered. The first project has a construction cost of SR 1,500,000. The operating cost is SR 40,000 annually and a maintenance is required every 7 years of the amount SR 45,000. The second project has a one-time initial cost of SR 1,000,000 with an annual operating cost of SR 30,000 and required a maintenance cost of SR 40,000 every 5 years. There is an additional cost of SR 100,000 in the 10th year only for the second project. Assume MARR is 18%. Identify the following using capitalized cost analysis: 1. The Capitalized Cost (CC) for the first project is: (unit: SR) a) 1,257,167 b) 2,732,850 c) 2,238,532 d) 1,742,812 2. The CC for the second project is: (unit: SR) a) 1,216,835 b) 1,097,977 c) 1,900,270 d) 1,409,308
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