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A city plans to upgrade its storm water management infrastructure by installing new pipes. The installation costs 1.0 million dollars and the annual maintenance cost
A city plans to upgrade its storm water management infrastructure by installing new pipes. The installation costs 1.0 million dollars and the annual maintenance cost is $21,000. Every 6 years, the system needs to be fully examined which requires a fixed management and material cost of $40,000 and a variable labor cost at the rate of $24/hr. 16 full time (working 8 hours per day) workers will be employed for 80 days for this task. If the infrastructure has a life time of 72 years and the city's interest rate is 8%, (Please round your answer to two decimal places at the million level for both questions, e.g. '1.23' millions) a. what is the capitalized worth of the project (in millions)? Please note that the value could be negative. b) what is the EUAC of the infrastructure (in million dollars)
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