4. The DICT has just installed new software for their project management. The director wants to know the total equivalent cost of all future costs incurred to purchase the software system. If the new system will be used for the indefinite future, find the ca pitalized cost. The system has an installed cost of $150,000 and has an additional cost of $50,000 after 10 years. The annual software maintenance contract cost is $5000 for the first 4 years and $8000 thereafter. In addition, there is expected to be a recurring major upgrade cost of $15,000 every 13 years. Assume that i=5% per year for their funds.

4. The DICT has just installed new software for their project management. The director wants to know the total equivalent cost of all future costs incurred to purchase the software system. If the new system will be used for the indefinite future, find the ca pitalized cost. The system has an installed cost of $150,000 and has an additional cost of $50,000 after 10 years. The annual software maintenance contract cost is $5000 for the first 4 years and $8000 thereafter. In addition, there is expected to be a recurring major upgrade cost of $15,000 every 13 years. Assume that i=5% per year for their funds.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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