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A city plans a pipeline to transport water from a distant area to the city. The pipeline will cost $6 million in today's dollars and
A city plans a pipeline to transport water from a distant area to the city. The pipeline will cost $6 million in today's dollars and will have an expected life of 70 years. The city expects it will need to keep the water line in service indefinitely. Compute the capitalized cost if market interest rate is 9% and expected annual inflation is 3%.
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