Question

In: Civil Engineering

The construction cost of a parking facility on a local university campus is $200,000. Assume that...

The construction cost of a parking facility on a local university campus is $200,000. Assume that

maintenance will begin on the facility at the end of the third year of operation, and will increase by

$500/year until the end of the useful life of the facility. Maintenance costs are expected to accrue to

$2,000 during the third year of operation. If the interest rate is 7%, and the facility is expected to last

25 years, find the following (5 points):

a) The present worth of the maintenance costs of the facility (2 points)

b) The facility’s annual maintenance costs. (2 points)

c)

The university wants to charge an annual decal rate of $200/year. Is this a good economic

decision if there are 50 spaces in the parking facility? (1 point)

Solutions

Expert Solution

Ally Wells answered 1 year ago
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