Determine the life-cycle cost of the planned structure

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The city of Valparaiso seeks to build a large water reservoir to serve its fast growing population. It has been estimated that the new steel structure will have an initial construction cost of $3M and an operating cost of $0.5M annually. The maintenance cost is expected to be $0.1M for the first 5 years and will grow at an annual rate of 1% until the end of its 30-year service life. The cost of demolition is $1.5M and the demolished structure can be sold as scrap metal for $0.5M. Determine the life-cycle cost of the planned structure.

Reference no: EM131014643

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