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D Question 16 1 pts Question 4 Part A: You have decided to invest in a project to build and run a production line for
D Question 16 1 pts Question 4 Part A: You have decided to invest in a project to build and run a production line for a friend. Your friend has specified that the production line needs to last forever, and will always be operational. The associated costs for the project are shown in the table below. How much should you charge your friend now for the production line in order to build and maintain the perpetual project? Interest rate is 6%. Costs Amount Year incurred Initial Cost $175,000 Year O Annual Operating & $10,000 Per year, forever Maintenance Costs Major Maintenance First in year 5, then $80,000 Costs every 5 years forever tenance Costs Major Maintenance Costs $80,000 First in year 5, then every 5 years forever Question 4 Part A: What is the equation used to find the portion due to the Nonrecurring Costs (the costs that do not repeat)? O P = 175000 OP 175,000 + 80,000(P/F, 6%, 5) OP 175,000 + 80,000(F/P, 6%, 5) OP 175,000 + 80,000(F/P, 6%, 1)
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