A home builder must construct a sewage treatment plant and deposit sufficient money in a perpetual trust
Question:
A home builder must construct a sewage treatment plant and deposit sufficient money in a perpetual trust fund to pay the $5000 per year operating cost and to replace the treatment plant every 40 years. The plant will cost $150,000, and future replacement plants will also cost $150,000 each. If the trust fund earn 8% interest, what is the builder's capitalized cost to const the plant and future replacements, and to pay the operating costs?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 71% (14 reviews)
Capitalized Cost PW of an infinite ...View the full answer
Answered By
Ehsan Mahmood
I’ve earned Masters Degree in Business Studies and specialized in Accounts & Finance. Couple with this, I have earned BS Sociology from renowned institute of Pakistan. Moreover, I have humongous teaching experience at Graduate and Post-graduate level to Business and humanities students along with more than 7 years of teaching experience to my foreign students Online. I’m also professional writer and write for numerous academic journals pertaining to educational institutes periodically.
4.90+
248+ Reviews
287+ Question Solved
Related Book For
Question Posted:
Students also viewed these Economics questions
-
If you deposit P dollars in a retirement fund every year for N years with the intention of then withdrawing Q dollars per year for M years, you must earn interest at a rate r satisfying P (b 1) = Q...
-
What interest rate must money earn for a payment of $1389 on August 20 to be equivalent to a payment of $1348 on the previous March 29?
-
The municipality of Duncan has financed a sewage treatment plant by issuing $18 million worth of sinking fund debentures . The debentures have a 15-year term and pay a coupon rate of 9% compounded...
-
Rice and Flower were partners sharing profit and loss equally. Statement of Financial Position as at 31 December 2020. Non current Assets Premises Machinery Vehicles Fittings Current Assets Inventory...
-
Describe alternatives for a service line structure internal to each VISN in the VA case.
-
Review your results from S22-3. Grippers expects cost of goods sold to average 60% of sales revenue, and the company expects to sell 4,100 pairs of shoes in March for $260 each. Grippers target...
-
Chemical Boost, Inc. isa manufacturer of TA5 chemical and derivative products. Presented below is select information from Chemical Boosts recent annual cas soy report. The footnotes to the companys...
-
Lang and Thomas, a local CPA firm, has been asked to bid on a contract to perform audits for three counties in its home state. Should the firm be awarded the contract, it must hire one new staff...
-
2. You are a client-centered therapist. Write one empathic clinician response and one sympathetic clinician response for each of the following client statements: (a) I cannot believe that my son...
-
b) c) Explain why the coupling capacitors do not have a significant effect on gain at [4 marks] sufficiently high-signal frequencies. List the capacitances that affect high-frequency gain in both BJT...
-
A man who likes cherry blossoms very much would like to have an urn full of them put on his grave once each year forever after he dies. In his will, he intends to leave a certain sum of money in the...
-
The local botanical society wants to ensure that the gardens in the town park are properly cared for. They recently spent $100,000 to plant the gardens. They would like to set up a perpetual fund to...
-
Big Game Inc. operates gaming stores across the country. Selected comparative financial statement data are shown below Instructions a. Calculate the following liquidity ratios for 2024 and 2023. 1....
-
Jerome Phillips is a marquee professional football player in year 4 of a 6-year, $30 million contract, but he is a working-class kid from New York, and he isn't sure how to handle all that money....
-
The following information about the weekly payroll was obtained from the records of Saine Co.: Salaries: Deductions: Sales salaries $625,000 Income tax withheld $232,260 Warehouse salaries 240,000...
-
following expenditures related to the vehicle were also made on July 1, 2025: The company pays $2,300 to GEICO for a one-year Insurance policy. The company spends an extra $5,000 to repaint the...
-
Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2024, the company decided to switch to the average cost method. Data...
-
38 Mobile homes present different property loss exposures because of their portability, construction, and site locations. The Mobile home additional coverage for Property Removed provides Expanded...
-
A variety of nursing careers exist, including registered nurse (RN), traveling nurse, licensed practical nurse (LPN), nurse manager, certified nursing assistant (CNA), float nurse, agency nurse,...
-
Interest Compounded Annually. When P dollars is invested at interest rate i, compounded annually, for t years, the investment grows to A dollars, where A = P(1 + i) t . Trevor's parents deposit $7800...
-
Systems thinking may have helped popularise project management and supply chain management, but does it have its limitations? If so, what are they?
-
An asset with an unadjusted basis of $50,000 was depreciated over ntax = 10 years for tax depreciation purposes and nbook = 5 years for book depreciation purposes. The annual depreciation was 1/n...
-
Pneumatics Engineering purchased a machine that had a first cost of $40,000, an expected useful life of 8 years, a recovery period of 10 years, and a salvage value of $10,000. The operating cost of...
-
An asset that is book-depreciated over a 5-year period by the straight line method has BV3 = $62,000 with a depreciation charge of $26,000 per year. Determine (a) The first cost of the asset (b) The...
-
The following data come from the financial records of Adams Corporation for Year 3. Sales $845,000 Interest expense 5,200 Income tax expense 27,500 Net income 24,000 Required How many times was...
-
The Better Future Inc. stock is selling for $32.60 a share based on a 14 percent rate of return. What is the amount of the next annual dividend if the dividends are increasing by 3.5 percent...
-
Fill out a Lease Abstract: NDUSTRIAL BUILDING LEASE THIS LEASE is made as of this Z 1 day of June, 2 0 1 0 betwe PROPERTIES TRUST, a Marland real estate investment trust ( " Landlord " ) , and INC.,...
Study smarter with the SolutionInn App