Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

6) A proposed airport terminal is expected to cost 4 million with a life of 40 years. The operating and maintenance costs are estimated as

image text in transcribed
image text in transcribed
image text in transcribed
6) A proposed airport terminal is expected to cost 4 million with a life of 40 years. The operating and maintenance costs are estimated as follows. Operations 1-40 years, begin at $100,000/yr, rising Maintenance 1-20 begin at s50,000/yr, rising 10% the second year and 10% more each year thereafter End of year maintenance 10 yr, S20,000 major rehabilitation, 21-40 yr, begin a $70,000/yr more cach year thereafter All costs of the terminal including construction will be financed at 6% and will be repaid by charging each passenger a fee. a) Assuming 1,000,000 passengers per year, what fee would be charged per passenger b) Assuming 70,000 passenger the first year and added 100,000 passengers each year thereafter, what fee should be charged

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Oxford Handbook Of Quantitative Asset Management

Authors: Bernd Scherer, Kenneth Winston

1st Edition

0199553432, 978-0199553433

More Books

Students also viewed these Finance questions