Question
Indiana Family Adventures IFA requires equipment for their theme park. The initial investment for each component is $45,548. Safety and reputation are very important in
Indiana Family Adventures IFA requires equipment for their theme park. The initial investment for each component is $45,548. Safety and reputation are very important in the company, and they anticipate yearly maintenance costs in the first year of operation of $1,896. Then, increments in the maintenance cost will happen at a pace of an additional $116 per year. Due to the normal wear and tear of the regular operation, the components lose value at a rate of 9%. IFA uses a MARR of 19.7% for their investment projects. What is the cost of owning these components of the theme park if their replacement is planned every 5 years?
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