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E253 - Company A is considering a long-term contract to outsource maintenance and operations that will improve the efficiency of the company. The payment schedule
E253 - Company A is considering a long-term contract to outsource maintenance and operations that will improve the efficiency of the company. The payment schedule has two large payments and continuing payments thereafter. The proposed payment schedule is $100,000 now, $500,000 five years from now, $10,000 every 10 years and an annual amount of $5,000 beginning 20 years from now and continuing indefinitely. What is the capitalized cost of this project with interest rate 6% per year compounded monthly?
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