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Please solve the above problem regarding cost of a project using the formulas given in DETAIL. Thank You! A project, with scheduled cost of $800,000,
Please solve the above problem regarding cost of a project using the formulas given in DETAIL. Thank You!
A project, with scheduled cost of $800,000, has been funded to be carried out in 12 months. The annual interest rate has been set for 12% if the project delivered on time. However, if the project goes beyond its delivery time, the annual interest will go up to 18%. Expenditures beyond $800,000 also attract 24% interest. Answer the following questions: a. What is the total cost of the project if the project can be delivered on time? b. What is the total cost of the project if the project's completion time is delayed for one month? c. What is the total cost of the project if the project's completion is delayed for one month and it costed $100,000 over the original estimate? P = F/(1 + i)^n P = A(1-(1 + i)^-n)/i NPV = -P + sigma^n_j-1 F_j/(1 + i)^j P: Present value F: Future Value i: Interest rate for the period A: Annuity NPV: Net Present Value nj: number of periodsStep by Step Solution
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