A city is spending $20 million on a new sewage system. The expected life of the system is 180 years, and it will have no market value at the end of its life. Oper.and maintenance expenses for the system are projected to average $0.6 million per year. If the city's MARR is 8% per year, what is the capitalized worth of thesystem?Select one:$27.5 millionO b$128.0 million$12.5 millionO d. $29.3 million

Given information : Initial expenditure = $20 million Time period = 180 years Periodic expenses =…

Answered: and maint system?

Business

Finance

and maint system?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 10PA: The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $60,000,...

See similar textbooks

Similar questions

The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $60,000, with annual net cash flows of $9,950 for 8 years. The required rate of return is 6%. Compute the net present value of this investment to determine whether or not you would recommend that Ham and Egg invest in this oven.
A city is spending $20.3 million on a new sewage system. the expected life of the system is 50 years. and it will have no market value at the end of its life. operatikg and maintance expenses for the system is average $0.5 million per year. If the citys MARR is %10 per year . what is the capitalized worth of the system? the study period is 100 years.
A city is spending $20.8 million on a new sewage system. The expected life of the system is 40 years, and it will have no market value at the end of its life. Operating and maintenance expenses for the system are projected to average $0.8 million per year. If the city's MARR is 12% per year, what is the capitalized worth of the system? The study period is 100 years. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. The capitalized worth of the system is S million. (Round to two decimal places.)
A city is spending $20 million on a new bridge. Operating and maintenance expenses for the bridge are projected to average $0.6 million per year starting year 3 onwards. Major repairs worth $1.5 million are expected every 5 years, starting on year 5 and throughout the infinite life of the project. What is the capitalized cost of the bridge project if the city's MARR is at 8%? Draw the cash-flow diagram before solving.
Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of $120,000. Annual maintenance expenses are expected to be $6,500 for the first 20 years and $8,500 for each year thereafter. The lighting will be needed for an indefinitely long period of time. With an interest rate of 10% per year, what is the capitalized cost of this project (choose the closest answer below)? (a) $178,313 (b) $188,000 (c) $202,045 (d) $268,000.
A neighborhood shopping center is expected to generate after-tax cash flow of $750,000 per year (at end of year) indefinitely. If an interested buyer has a cost of money of 13 %, how much will he be willing to pay for this shopping center? A $6.64 million B) $7.50 million $5.77 million D $2.21 million
Barcelona Football Club is spending $2 million on a new sewage system. The expected life of the system is 40 years, and it will have no market value at the end of its life. Operating and maintenance expenses for the system are projected to average $0.1 million per year. If the team MARR is 8% per year, what is the capitalized worth of the system' detailed answaer without using excel
The general city population is set to benefit in travel-time savings from a municipal road project amounting to $14,095,000. The local government will incur an initial spending of $11,500,000 and an annual operating and maintenance cost of $400,000. This new road will cut back the need for annual maintenance on other roads by $150,000. Considering an interest rate of 5%, how many years will it take for this project to break even? Round answer to the nearest whole number.
A new water treatment plant proposed for Anytown, has an initial cost of P56 million. The new plant will service the 7,500 residential customers for the next 30 years. It is expected to save each customer P125 per year. The plant will require a major overhaul every 5 years, costing P1million. Determine the benefit/cost ratio at the city’s interest rate of 6%. Use PW and EUAC. complete solutions
Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of $140,000. Annual maintenance expenses are expected to be $6,600 for the first 5 years and $9,500 each year thereafter upto 30 years. With an interest rate of 6% per year, what is the present worth cost of this project? Choose the closest answer below. A. The present worth cost of the project is $298,567. B. The present worth cost of the project is $258,550. C. The present worth cost of the project is $289,243. D. The present worth cost of the project is $361,614.
A landfill has a first cost of $274,000. Actual operating and maintenance costs for the first year will be $48,000. and increase each year by 10%. Expected income for the landfill will be $142,000 each year in actual dollars. The landfill will be operating for 10 years. Inflation will average 5.4%, and a real return of 3.1% is desired. What is the present worth of this project using: a. A then-current (actual dollar) analysis. $ Round entry to two decimal places. The tolerance is ±20. b. A constant dollar analysis. $ Round entry to two decimal places. The tolerance is ±20.
Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of $100,000. Annual maintenance expenses are expected to be $6,650 for the first 9 years and $9,500 each year thereafter upto 30 years. With an interest rate of 8% per year, what is the present worth cost of this project? Choose the closest answer below OA. The present worth cost of the project is $236,701. OB. The present worth cost of the project is $248,491. OC. The present worth cost of the project is $189,145 OD. The present worth cost of the project is $281,813 27