Calculate the equivalent annual cost

Reference no: EM131016869

Two costs of construction of a small, remote mine are for labor and transportation. Labor costs are expected to be $130,000 the first year, with inflation of 6% annually for 4 years. Unit transportation costs are expected to inflate at 5% annually, but the volume of material of material being moved changes each year. In today's dollars, the transportation costs are estimated to be $40,000, $60,000, $50,000, and $30,000 in years 1 through 4. The inflation rate for the value of the dollar is 3%. If the firm uses an inflation free MARR of 7%, calculate the equivalent annual cost for this 4-year project.

Reference no: EM131016869

Questions Cloud

Discuss the business implications of your findings : A milk company has four machines that fill gallon jugs with milk. The quality control manager is interested in determining whether the average fill for these machines is the same. The following data represent random samples of fill measures (in qu..

A review of the ledger of carmel company at december : A review of the ledger of Carmel Company at December 31, 2014, produces the following data pertaining to the preparation of annual adjusting entries.

How the historical development of policing in the u.s : Support your discussion with examples from law enforcement practices, court procedures, corrections populations, or all three.

What would these pressures be in pascals : Blood pressure is usually given as a ratio of the maximum pressure (systolic pressure) to the minimum pressure (diastolic pressure). Such pressures are commonly measured with a mercury manometer. A typical value for this ratio for a human would be..

Calculate the equivalent annual cost : If the firm uses an inflation free MARR of 7%, calculate the equivalent annual cost for this 4-year project.

International financial reporting standards : Use the Internet to research the current provisions and proposed changes reflected in the exposure draft for lease accounting under generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS).

Average accounts receivable figure : Two Doors Down, Inc., has weekly credit sales of $39,300, and the average collection period is 41 days. (Enter your answer as directed, but do not round intermediate calculations.)

Calculate the return on equity : Firm L ia a leveraged firm with 50% of debt and 50% of common equity. the pre-tax cost of debt for firm L is 10%. Both firms have 40% corporate tax rate. Calculate the return on equity(ROE) for firm U.

What is the value of firm : What is the value of firm U in $millions? What is the value of firm L in $millions?

User Account

All Pages