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A city that is attempting to attract a professional football team is planning to build a new stadium costing $260 million. Annual upkeep is expected
A city that is attempting to attract a professional football team is planning to build a new stadium costing $260 million. Annual upkeep is expected to amount to $900,000 per year The artificial turfwill have to be replaced every 10 years at a cost of $960,000. Painting every 5 years will cost $85,000. If the city expects to maintain the facility indefinitely, what will be its capitalized cost at an interest rate of 8% per year? Solve in excel and manually Recurring Cost: Replacing artificial turf Cost (Every 10 Annual Recurring Cost: Painting Cost every 5 vears For infinite life alternatives, if there is a Present worth value=> keep it as it is Installation Cost maintenance Year Cost 0 -260,000,000 -900,000 1 if there is a non-recurring single payment (s) => we should directly covert it (them) to the Present worth using appropriate factor/ factors 2 -900,000 3 -900,000 900,000 4 if there is a Recurring single amount=> we should convert them into an "A" value and then divide byi -85,000 5 -900,000 6 -900,000 If there is a Seri ( annual worth) which has started from the end of year 1 till end of year n=> we should divide its value by i% ( A/i) to find Present Worth 7 -900,000 -900,000 -900,000 10 -960,000 -900,000 -85,000 If there is a Seri that is started from any periods after period 1 and continues till the end of year n=> we should divide its value by i first (A/i) and then use a proper factor to convert it to the Present Worth at the end of year 0 11 -900,000 12. -900,000 13 900,000 Infinite ? ? 1 CC2 ? CC4 CC total A city that is attempting to attract a professional football team is planning to build a new stadium costing $260 million. Annual upkeep is expected to amount to $900,000 per year The artificial turfwill have to be replaced every 10 years at a cost of $960,000. Painting every 5 years will cost $85,000. If the city expects to maintain the facility indefinitely, what will be its capitalized cost at an interest rate of 8% per year? Solve in excel and manually Recurring Cost: Replacing artificial turf Cost (Every 10 Annual Recurring Cost: Painting Cost every 5 vears For infinite life alternatives, if there is a Present worth value=> keep it as it is Installation Cost maintenance Year Cost 0 -260,000,000 -900,000 1 if there is a non-recurring single payment (s) => we should directly covert it (them) to the Present worth using appropriate factor/ factors 2 -900,000 3 -900,000 900,000 4 if there is a Recurring single amount=> we should convert them into an "A" value and then divide byi -85,000 5 -900,000 6 -900,000 If there is a Seri ( annual worth) which has started from the end of year 1 till end of year n=> we should divide its value by i% ( A/i) to find Present Worth 7 -900,000 -900,000 -900,000 10 -960,000 -900,000 -85,000 If there is a Seri that is started from any periods after period 1 and continues till the end of year n=> we should divide its value by i first (A/i) and then use a proper factor to convert it to the Present Worth at the end of year 0 11 -900,000 12. -900,000 13 900,000 Infinite ? ? 1 CC2 ? CC4 CC total
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