A minor league baseball stadium is built at a cost of $12,000,000. The annual maintenance costs are expected to cycle every 6 years with a cost of $18,000 the first year and $2000 each year thereafter until the cost is $28,000 at the end of Year 6. The maintenance costs cycle will repeat starting with $18,000 in Year 7. Every 6 years an expenditure of $1,500,000 must be made to renovate and update the stadium. Determine the capitalized cost at 4%.

Assume that Walmart Inc. has decided to surface and maintain for 10 years a vacant lot next to one of its stores to serve as a parking lot for customers. Management is considering the following bids involving two different qualities of surfacing for a parking area of 11,300 square yards. Bid A: A surface that costs $5.25 per square yard to install. This surface will have to be replaced at the end of 5 years. The annual maintenance cost on this surface is estimated at 25 cents per square yard for each year except the last year of its service. The replacement surface will be similar to the initial surface. Bid B: A surface that costs $10.75 per square yard to install. This surface has a probable useful life of 10 years and will require annual maintenance in each year except the last year, at an estimated cost of 12 cents per square yard. Click here to view factor tables. Compute present value of the bids. You may assume that the cost of capital is 12%, that the annual maintenance…

Torbet Fish Packing Company wants to accumulate enough money over the next 12 years to pay for the expected replacement of its digitalized, automated scaling machine. The new machine is expected to cost $240,000 in 12 years. Torbet currently has $15,000 that it plans to invest over the next 12 years to help pay for the new machine. Torbet wants to put away an equal, end-of-year amount into a sinking fund investment account at the end of each of the next 12 years. Earnings on all of the investments are expected to be 8 percent for the first six years and 10 percent thereafter. What equal, end-of-year amount must Torbet save each year over the next 12 years to meet these needs? Use Table I and Table III or a financial calculator to answer the question. Round your answer to the nearest dollar.

City of Oliver is considering automating a process in its accounting department that has been labor-intensive.  The equipment currently used in the department can be sold.  The new equipment will have a projected useful life of 10 years.  The old equipment has a remaining useful life of 10 years.  The following data are available to be used in making the decision.  Should the city invest in the new equipment?  Support your answer with appropriate calculations. Current equipment    Current equipment book value                    $  30,000    Annual depreciation charges                             3,000    Current estimated disposal value          5,000 New equipment                                                  Cost                                                  $150,000    Annual depreciation charge                12,500    Expected disposal value                      25,000 Labor savings each year                                $  50,000 Present value factors @ 6%             $1…