What is capitalized cost of the marina if the interest rate

Assignment Help Financial Management

Reference no: EM131492558

1) 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?

2) XBC Inc. is planning to buy a new car. Model A costs $22,000 and is expected to have a life of 4 years. Model B costs $35,000 but it is expected to last 6 years. Model B provides a better warranty and it will save the company an average of $1,000 per year in covered costs. At the end of its life, either car can be replaced with a similar model at the same cost. The salvage value is expected to be 10% of original cost for either model. Using annual worth analysis and an interest rate of 5% per year, determine the better buy.

Please show all the steps for obtaining the answers

Reference no: EM131492558

Questions Cloud

What is the value of the quick ratio : Jessica's Boutique has cash of $218, accounts receivable of $457, accounts payable of $398, and inventory of $647. What is the value of the quick ratio?

Compute the annual mrp and default risk premium : Compute the (a) annual MRP, and (b) default risk premium (DRP) associated with the bonds.

Projecting nonstatistical sample ressult : Which of the following statements is false regarding methods for projecting a nonstatistical sample result?

The decision rule for classical variable sampling : The decision rule for classical variable sampling is "Accept the conclusion that the account is not misstated by a material amount if

What is capitalized cost of the marina if the interest rate : What is the capitalized cost of the marina if the interest rate is 4% per year?

Using net present value when evaluating projects : Green Landscaping. Inc. is using net present value (NPV) when evaluating projects.The project will produce the same after-tax cash inflows of $655.460 per year

What is the yield to maturity for treasury bonds : what is the yield to maturity for treasury bonds that mature at the end of (A) 2018 (a two-year bond) and (B) 2019 (a three-year bond)?

What is annual percentage rate on your account : Your credit card company charges you 1.18 percent per month. What is the annual percentage rate on your account?

The impact of social networks on the communication skills : The impact of social networks on the communication skills of young people in Oman, Lack of face-to-face contact is becoming a serious issue.

User Account

All Pages