Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Calculate the capitalized cost of $60,000 every 6 years forever, starting now at an interest rate of 8% per year. | Project Year Recurring cost

image text in transcribedimage text in transcribed

Calculate the capitalized cost of $60,000 every 6 years forever, starting now at an interest rate of 8% per year. | Project Year Recurring cost First Cost -60,000 Cash flow, $ -60,000 1 O For infinite life alternatives, if there is a Present worth value=> keep it as it is if there is a non-recurring single payment (S) => we should directly covert it (them) to the Present worth using appropriate factor/ factors -60,000 -60,000 if there is a Recurring single amount=> we should convert them into an A value and then divide by i. -60,000 -60,000 lo TO 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. Infinite 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. cc1 cc2 CC

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management In Construction Contracting

Authors: Andrew Ross, Peter Williams

1st Edition

1405125063, 9781405125062

More Books

Students also viewed these Finance questions

Question

Find Io in the circuit shown. 6 > 12 O4 3 12 12 6

Answered: 1 week ago