Question

A coal-fired power plant has upgraded an emission control valve. The modification cost $8,000 and its expected to last 6 yearw with a $200 savage value. The maintenance cost is expected to be high at $1700 the first year and, increasing by 11% per year thereafter. The firm uses an interest rate of 8%.

A) Calculate the equivalent Annual expense of the modification and the maintenance cost?

B) What is the future worth of the maintenance cost and the modification in year 6.

(Use stuff like A/G or A/P or A/F to where looking up interest table is needed please. )

Answer 1

ie Sava& value. ofter 6 years ,420 mounte nana Cast =书17co (which incranes 11 % per-yer) - _cA The-equivalent-Proul-expere op -pr dific fan. the + 916 gote ol chaye in maintorefast fes yea

0.o8-0.1 -17989. Maw ue have total expense of the modiitation and the main tenore as t 17981 The equivlent Apnl noal espense of the molhcahon pad-the maintenance -cast S 299817- maintenance ases) alvage-llers). 1700 17o0 a-l 1760 (1-1)3 TOD (시)) 2. 5 6 Oo The futueWoth of the mainten and the modiation in Yeor 6 ould he amce ast