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A city is offering to install and operate a water pumping station to provide service to a proposed new production facility. The station will cost
A city is offering to install and operate a water pumping station to provide service to a proposed new production facility. The station will cost $25,000 now Plus S3.000 in operating costs for the next 3 years, all measured in year-0 constant dollars. 1 o reimburse the city, the new business must pay a fixed uniform annual fee, A, at the end of each year for 3 years to cover the construction and operating costs of the station. It is agreed that the city should receive a 3.8% real rate of return after taking an inflation rate of 5.0% into account. Determine the equivalent uniform annual cost in actual dollars to the new business
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