Reference no: EM131880168

1. "To decrease the cost of operating a lock in a large river, a new system of operation is proposed. The system will cost $840,000 to design and build. It is estimated that it will have to be reworked every 12 years at a cost of $170,000. In addition, a one-time expenditure of $78,000 will have to be made at the end of the fifth year for a new type of gear that will not be available until then. Annual operating costs are expected to be $76,000 for the first 17 years and $106,000 thereafter. Compute the capitalized cost of perpetual service at i = 7.4%. Enter your answer as a POSITIVE number."

2. "The military is considering purchasing a new transport helicopter. It is believed the helicopter will be needed for 28 years. Helicopter 1 has an immediate purchase cost of $117,000; the annual maintenance is $3,000; and it can be salvaged for $15,000 at the end of its service life of 4 years. Helicopter 2 has an immediate acquisition cost of $152,000; the annual maintenance is $7,000; and it can be salvaged for $32,000 at the end of its service life of 7 years. Assume both helicopters can be purchased and operated repeatedly at the same costs. What is the annual equivalent cost of the helicopter that the military should purchase if the interest rate is 11.9%?"