The US Army Corps of Engineers is considering a safety modification to the Keystone Dam. The...
The US Army Corps of Engineers is considering a safety modification to the Keystone Dam. The modification will have a first cost of $5,000,000 with annual maintenance costs of $25,000 and minor reconstruction costs of $100,000 every five years. If the Corps uses an interest rate of 8%/yr/yr, what is the capitalized cost of the dam?
Homework Answers
capitalized cost = 5000000 + 25000 / 0.08 + [100000 * (A/P, 8%,5)] / 0.08
= 5000000 + 25000 / 0.08 + [100000 * 0.170456] / 0.08
= 5525570.57
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The US Army Corps of Engineers is considering a safety modification to the Keystone Dam. The...
Problem 3 - (11 pts) The US Army Corps of Engineers is considering a safety modification to the Keystone Dam. The modifi...
Problem 3 - (11 pts) The US Army Corps of Engineers is considering a safety modification to the Keystone Dam. The modification will have a first cost of $5,000,000 with annual maintenance costs of $25,000 and minor reconstruction costs of $100,000 every five years. If the Corps uses an interest rate of 8%/yr/yr, what is the capitalized cost of the dam?
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