Investor is considering the construction of a new marina

Reference no: EM13697585

An investor is considering the construction of a new marina on the Detroit river at a cost of $68m. M&O costs will average $80,000 per year for the first five years, and rise to $100,000 per year thereafter. A major overhaul costing $12m will be required at the end of the 15th year. The overhaul will be repeated (at the same cost) every 10 years thereafter. What is the capitalized cost of the marina if the interest rate is 4% per year?

Reference no: EM13697585

Questions Cloud

Stackelberg and cournot competition : Apple put on the first smart phone, making them the Stackelberg leader. Samsung, HTC and Sony release their smart phones some time later. Consider the market competition game between these three companies. Apply chooses its output level q1 first.

The current inflation rate : The current inflation rate in Iran is roughly 23% per year (because of economic mismanagement and UN sanctions). How should a prudent Iranian invest a large sum of rials today to preserve/grow its future value?

Explain the elasticity of supply for gasoline : Explain how to measure the price elasticity of demand and supply and the cross-elasticity income elasticity of demand? Explain the elasticity of supply for gasoline?

Calculate the price elasticity of demand of gasoline : Explain how you would calculate the price elasticity of demand of gasoline? In general terms, explain how consumer and producer surplus will change as a result of this price increase?

Investor is considering the construction of a new marina : An investor is considering the construction of a new marina on the Detroit river at a cost of $68m. M&O costs will average $80,000 per year for the first five years, and rise to $100,000 per year thereafter. A major overhaul costing $12m will be requ..

Calculate the present value of annuity with annual deposits : Calculate the present value of an annuity with annual deposits of $10,000 at 7% for 10 years. Determine the monthly payment to amortize a $250,000 debt at 3% for 30 years.

Government of a nation established a price support for wheat : In 2011, the government of a nation established a price support for wheat. The government’s support price has been above the equilibrium price each year since, and the government has purchased all wheat over and above the amounts that consumers have ..

Price of a medical drug below the equilibrium price : Suppose that the government places a ceiling on the price of a medical drug below the equilibrium price. Explain why there is a shortage of the medical drug at the new ceiling price.

Budget constraint for the individual with the composite good : An individual has an income of $1000 per month with which they buy the composite good with a price of $1 and food with a price $2/unit of food. Draw the budget constraint for the individual with the composite good on the y-axis and food on the x-axis..

User Account

All Pages