A new generator has been installed. There will be no maintenance cost until the end of the sixth year when P500 will be spent at the end of each successive year until the fourteenth year when the generator will be scrapped. How much money should be set aside now to be able to sustain these maintenance charges at 6% annually? Please also show the cash flow diagram Thank you very much
A new generator has been installed. There will be no maintenance cost until the end of the sixth year when P500 will be spent at the end of each successive year until the fourteenth year when the generator will be scrapped. How much money should be set aside now to be able to sustain these maintenance charges at 6% annually? Please also show the cash flow diagram Thank you very much
Chapter10: Project Cash Flows And Risk
Section: Chapter Questions
Problem 7PROB
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A new generator has been installed. There will be no maintenance cost until the end of the sixth
year when P500 will be spent at the end of each successive year until the fourteenth year when
the generator will be scrapped. How much money should be set aside now to be able to sustain
these maintenance charges at 6% annually?
Please also show the cash flow diagram Thank you very much
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