What is the builder''s capitalized cost to const the plant

Reference no: EM13205430

A home builder must construct a sewage treatment plant and deposit sufficient money in a perpetual trust fund to pay the $5000 per year operating cost and to replace the treatment plant every 40 years. The plant will cost $150,000, and future replacement plants will also cost $150,000 each. If the trust fund earn 8% interest, what is the builder's capitalized cost to const the plant and future replacements, and to pay the operating costs?

Reference no: EM13205430

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