Check my work Determine the capitalized cost of a permanent roadside historical marker that has a...

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Question

Answer 1

Answer #1

Solution:

for the present value of maintenance cost ,is 5 years

period can be treated as a single period with an equilibrium interest rate of:

(1+14%)⁵ -1 =92.54%

maintenance cost = $ 2900 / 92.54 %

= $3133.78

Capitalized cost = $ 85000 + $ 3133.78

= $88133.78

Answer 2

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