Compute the capitalized cost of perpetual service

Assignment Help Financial Management

Reference no: EM131957973

"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 7 years at a cost of $130,000. In addition, a one-time expenditure of $72,000 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 $72,000 for the first 12 years and $102,000 thereafter. Compute the capitalized cost of perpetual service at i = 6.3%. Enter your answer as a POSITIVE number."

Reference no: EM131957973

Questions Cloud

Current exchange rate between us dollar and japanese yen : The current exchange rate between the U.S. dollar and the Japanese yen is 113?(yen/$). That? is, 1 dollar can buy 113yen.

What is the investor new margin position : Assume that an investor buys 100 shares of stock at $ 54 per share, putting up a 55 % margin. what is the investor's new margin position?

Firm operating return on assets and return on equity : Calculate the? firm's operating return on assets and return on equity.

Interest rate used in computing project balance : Determine the interest rate used in computing the project balance.

Compute the capitalized cost of perpetual service : Compute the capitalized cost of perpetual service at i = 6.3%.

Determine whether interest rate parity is currently holding : Determine whether interest rate parity is currently holding.

Requires specific painting process : "Motors R Us requires a specific painting process for one its automobiles that will be manufactured for exactly eight years.

What is level of brenmar inventories : If Brenmar's accounts receivable equal $561,700, what is its average collection period? What is the level of Brenmar's inventories?

Explain how one might be able to use compensation plan : Explain how one might be able to use a compensation plan that will limit potential agency problems.

User Account

All Pages