Question

Quest on 11 Not yet answered Points out of 3.75 P Flag question (NOTE: ENTER YOUR ANSWER WITHOUT THE $, in millions of dollars, ROUNDED TO TWO DECIMAL PLACES, for instance as 5.63, not as $5,634,000. Do not round your intermediate calculations too much.) A local utility company is requesting permission to increase the price of electricity, due to its plan to replace its outdated, 50 year old facility with a newly constructed plant. The regulator needs to estimate the cost of constructing the new facility. The plant consists of 4 units, each with its own unique cost structure. A similar facility was constructed in 2006, at a cost of $8.8 million. Below is the percent contribution of each of the 4 units to total cost, as well as the corresponding price index values for 2006, and the current year. What is the estimated cost of constructing the new facility this year? Index * Current Contributor Cost Index Percent 2006 Vear Year 4 39 Unit A Unit B Unit C Unit D Answer: FO BNIM

Answer 1

Answer:

Estimated Cost of constructing new facility this year = $13,057,308.14

If the answer is required in millions it will be = $13.06 million

Working:

Index Current Value as of 2006 (A Cost contributor Percent (P) Index 2006 (B) Current estimated cost = 8,800,000 *P) Year (C) (A* C/B) Unit A 4% $352,000 41 | $370,051.28 Unit B $616,000 94 $782,486.49 Unit C 5% $440,000 $570,370.37 Unit D 84% $7,392,000 46 $11,334,400.00 Estimated Cost of constructing new facility this year = $13,057,308.14 7% 74 277