🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Economics
1
answer
0
watching
145
views

The highway department expects the cost of maintainence for a peice of heavy construction equipment tp be $5000 in year , then increase to $5500 in year 2, and increase $500 anually til year 10. At interest rate 10% per year determine the present worth of 10 years of maintainence costs.

Watch
1
answer
0
watching
145
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Divya Singh
Divya SinghLv10
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Suppose that a major city's main thoroughfare, which is also an interstate highway, will be completely closed to traffic for two years from January 2012 to December 2013 for reconstruction, at a cost of $535 million. If the construction company were to keep the highway open for traffic during construction, the highway reconstruction project would take much longer and be more expensive. Suppose that construction would take four years if the highway were kept open, at a total cost of $800 million. The state department of transportation had to make its decision in 2011, one year before the start of construction (so that the first payment was one year away). The department of transportation had the following choices:

(i) Close the highway during construction, at an annual cost of $280 million per year for two years.

(ii) Keep the highway open during construction, at an annual cost of $200 million per year for four years.

a. Suppose the interest rate is 8%. Calculate the present value of the costs incurred under each plan. Which reconstruction plan is less expensive?

b. Now suppose the interest rate is 16%. Calculate the present value of the costs incurred under each plan. Which reconstruction plan is now less expensive?

Kelsey Construction has purchased a crane that comes with a 5-year warranty. Repair costs are expected to average $5000 per year beginning in Year 6 when the warranty expires. Determine the present worth of the crane’s repair costs over its 15-year life. The interest rate is 10%.

1.

IPS. Corp will upgrade its package-labeling machinery. It costs $150,000 to buy the machinery costs, which are $5000 per year for the first 3 years, increase by $500 per year for the machine’s 10-year life. The machinery has a salvage value of 5% of its initial cost. Interest is 15%. What is the future worth of cost of the machinery?

2) Each of the three mutually exclusive alternatives shown has a 5-year useful life. If the MARR is 10%, which alternative should be selected? Solve the problem by cost-benefit ration analysis.

A B C

cost $600.0 $ 500.0 $200.0

uniform annual benefit 158.3 138.7 58.3

3) A project has the following costs and benefits. What is the payback period

Year Cost Benefits

0 $55,000

1 $15,000

2 $5,000 $50,000

3-10 $5000 in each year

B) Mention two disadvantages of using the payback period analysis

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in