The annual maintenance and operating (M&O) cost was estimated to be $2,500 in Year 1 through...

The annual maintenance and operating (M&O) cost was estimated to be $2,500 in Year 1 through Year 4, and $4,400 in Year 5 through Year 9. Estimate the future value of the M&O cost (at t=9) with an interest rate of 11% per year.

Expert Solution

Year	Amount	× FVF	Future value
0
1	2,500	2.30454	5,761.34
2	2,500	2.07616	5,190.40
3	2,500	1.87041	4,676.04
4	2,500	1.68506	4,212.65
5	4,400	1.51807	6,679.51
6	4,400	1.36763	6,017.58
7	4,400	1.23210	5,421.24
8	4,400	1.11000	4,884.00
9	4,400	1.00000	4,400.00
Total			47,242.75

Answer is:

47,242.75

jeff jeffy answered 3 years ago

Economics Question. Please answer ASAP! Will provide thumbs up! Car's annual operating and maintenance (O&M) costs...

Economics Question. Please answer ASAP! Will provide thumbs up! Car's annual operating and maintenance (O&M) costs are given by the following schedule: Year Value 1 50 2 100 3 100 4 170 5 240 If MARR = 10%, and it is known that the value of O&M costs in the first year is the base annuity, define the value of parameter G in the equivalent arithmetic gradient series. (Note: Don't use the $ sign in your answer and keep 2...

A loan of $20,000 is repaid through annual, end of year payments of $2,500 each. The...

A loan of $20,000 is repaid through annual, end of year payments of $2,500 each. The end of year final payment is reduced and the annual effective rate is 8%. Find the outstanding loan balance after $15,000 has been repaid.

Alternative 1 has a capital cost of $2,069,000 and annual O&M cost of $348,000 Alternative 2...

Alternative 1 has a capital cost of $2,069,000 and annual O&M cost of $348,000 Alternative 2 has a capital cost of $7,182,000 and annual O&M cost of $394,000 Number of years = 30, interest rate = 3% Compare the two alternatives using the present worth method AND annual cost method. Which is least costly? Are the conclusions same for each method?

Alternative A has an initial acquisition cost of $10,000 and an annual average operating and maintenance...

Alternative A has an initial acquisition cost of $10,000 and an annual average operating and maintenance cost of $1402 per down time. Alternative B has a higher acquisition cost of $20,000, but has a lower annual average operating and maintenance cost of $500 per down time. With an expected lifetime of 5 years for both alternatives, and an annual interest of 5%, determine the break even number of down times per year. please show all work

vompany need to decide .a initial cost -225000000 annual operations cost -30000000 maintenance cost 50000000 estimated...

vompany need to decide .a initial cost -225000000 annual operations cost -30000000 maintenance cost 50000000 estimated life in years -infinite and b option inital ckst - 350000000 annual depreciation cost 6000000 maintenance cost per every 20 ysars 30000000 .estimated life - infinite marr is 7% which option you would recommend

1. An existing machine of a company requires P20,000 for O&M (Operations and Maintenance). If the...

1. An existing machine of a company requires P20,000 for O&M (Operations and Maintenance). If the company decides to sell the machine now, it can be sold for P15,000. If the company decides to use it, the machine will last for 10 more years but the salvage value at that time will be zero. Another plan is to overhaul the existing machine at a cost of P10,000 which is expected to reduce the annual O&M to P15,000. Its economic life...

A machine cost $30,000 initially and has no salvage value. The O&M costs in year 1...

A machine cost $30,000 initially and has no salvage value. The O&M costs in year 1 were $10,000 and have been increasing by $2,000 from year 2. The minimum cost life of this machine for a MARR of 10 %. (show your solution) A. 4 years B. 2 years C. 6 years D. None of above

Alternative R has a first cost of $88,000, annual M&O costs of $62,000, and a $20,000...

Alternative R has a first cost of $88,000, annual M&O costs of $62,000, and a $20,000 salvage value after 5 years. Alternative S has a first cost of $175,000 and a $58,000 salvage value after 5 years, but its annual M&O costs are not known. Determine the M&O costs for alternative S that would yield a required incremental rate of return of 23%. The M&O cost for alternative S is $

A new manufacturing plant costs $5,150,000 to build. Operating and maintenance costs are estimated to be...

A new manufacturing plant costs $5,150,000 to build. Operating and maintenance costs are estimated to be $43,000 per year, and a salvage value of 25% of the initial cost is expected. The units the plant produces are sold for $35 each. Sales and production are designed to run 365 days per year. The planning horizon is 10 years. Find the break-even value for the number of units sold per day for each of the following values of MARR: A/ 5%...

During the current year, KB has the following costs: Utility Costs for Home $2,500 Maintenance and...

During the current year, KB has the following costs: Utility Costs for Home $2,500 Maintenance and Repairs for Home 3,100 Property Taxes for Home 5,400 House Insurance 1,300 Interest on Mortgage 4,600 Home Telephone Monthly Charge 600 Separate Line to Home-Work-Space Monthly Charge 480 Employment Related Long Distance Charges 560 Home Internet Service Fees 720 KB estimates that he/she uses 18 percent of his residence and 30 percent of his home internet service for employment/business related purposes. Maximum CCA on...

Question