Chapter 04, Problem 054 (Video Solution) A flood control project at Pleasant Val

Question

Chapter 04, Problem 054 (Video Solution) A flood control project at Pleasant Valley dam is projected to cost $2,490,000 today, have annual maintenance costs of $47,000, and have major inspection and upkeep after each 7-year interval costing $280,000. If the interest rate is 7%/year. Click here to access the TVM Factor Table Calculator stion with available attempts Step 1 Determine the capitalized cost of Annual Maintenance.$ Round entry to 0 decimal places. The tolerance is ±1. By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Attempts: 0 of 1 used SAVE FOR LATER SUBMIT ANSWER SAVE FOR LATER SUBMIT ANSWER Earn Maximum Points available only if you answer this question correctly in your first attempt.

Explanation / Answer

Capitalized cost of annual maintenance = 47000/0.07 + [280000(A/F,7%,7) / 0.07]

= 671428.571428 + [280000(0.1156)/0.07]

= $1133829

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