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A hydroelectric dam would cost $50,000,000 to build, and annual maintenance cost of $1,000,000 need to be made per year. In addition to that, every
A hydroelectric dam would cost $50,000,000 to build, and annual maintenance cost of $1,000,000 need to be made per year. In addition to that, every 5 years, a major overhaul cost of $4,000,000 needs to be made. Assuming the interest rate of 10% per year, and the dam is expected to last indefinitely. The hydroelectric dam can produce 20 mega-watts of power. a. What would be the annualized cost of the dam? b. The second option is buying the electricity from neighboring country at $0.04/kWh, assuming that each year consists of 365 days, which option would be better? Why? (P/A, i%, infinity) = A/i Bond dividend amount = (bond coupon rate)*(bond face value)umber of dividends per year P= A_1 [1 - (1 + g)"(1 + i)^-infinity /i - g] where i notequalto g
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