Question
If a public works project was planned to construct a new, permanent football stadium, and its initial cost was $900M The new stadium yearly maintenance
If a public works project was planned to construct a new, permanent football stadium, and its initial cost was $900M
The new stadium yearly maintenance cost was $1M/year for years 1-10, growing to $2M/year thereafter
The new stadium required repainting every 10 years at a cost of $2.5M
The new stadium required a new grass surface every 5 years at a cost of $3M, and
The new stadium had a one time Bond payment cost of $15M in year 30
What is the Present Worth cost of this permanent project if city money is available to be borrowed at 5%?
What is the Annual amount/year Orlando will be committed to?
-Please answer both questions
Proccess I have taken: Leave the initial cost alone, treat the maintinence years 1-10 as an anuity that brings the the cost to present, then years 11-20 trast as an anuity that brings the cost to year 9 then year 9 to present, then for the paint and grass i take each individual value and bring it to year 0. I got $935.1898 million. for the annual ammount i took the present value and spread it out using an anuity as (a/p, 5%, 30) and got $60.83. Is this correct?
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