Question

A local planning commission has estimated the first cost of a new city- owened amusement park to be $35,000. They expect to improve the park by adding new rides every year for the next 5 years at a cost of S6000 per year. Annual operating costs are expected to be $12,000 the first year; these will increase by $2000 per year until year 5. After that time, the operating expenses will remain at $20,000 per year. The city expects to receive $11,000 in profits the first year, $14,000 the second, and amounts increasing by per year until year 8, after which the net profit will remain the same. Calculate the capitalized cost of the park if the interest rate is 6% per year. S3000

Solve it by using Compounded Interest Factors Tables

Answer 1

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