The school board asks your help in comparing alternative methods of providing schools in a newly...
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The school board asks your help in comparing alternative methods of providing schools in a newly developed suburban area. Find the equivalent annual costs of each of the following alternatives, using i= 10 percent, over a 20-year period. Build a new school cost new for school and equipment = $2,000,000 O & M costs for the first year of operation = $400,000/yr T O & M cost gradient for subsequent years increase 8%/yr gradient salvage value at BOY 20 = $ 200,000 Contract for busing pupils to nearest existing school cost the first year = $300,000/yr arithmetic gradient increase each subsequent year= $ 30,000/yr/yr The school board asks your help in comparing alternative methods of providing schools in a newly developed suburban area. Find the equivalent annual costs of each of the following alternatives, using i= 10 percent, over a 20-year period. Build a new school cost new for school and equipment = $2,000,000 O & M costs for the first year of operation = $400,000/yr T O & M cost gradient for subsequent years increase 8%/yr gradient salvage value at BOY 20 = $ 200,000 Contract for busing pupils to nearest existing school cost the first year = $300,000/yr arithmetic gradient increase each subsequent year= $ 30,000/yr/yr
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SOLUTION The annual equivalent cost of build alternative is 9... View the full answer
Related Book For
Financial Accounting Theory and Analysis Text and Cases
ISBN: 978-1118582794
11th edition
Authors: Richard G. Schroeder, Myrtle W. Clark, Jack Cathey
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