An item is purchased for P150,000. Annual operating cost is P15,000. Using an interest rate of 8%, what is capitalized cost of perpetual service
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An item is purchased for P150,000. Annual operating cost is P15,000. Using an interest rate of 8%, what is capitalized cost of perpetual service?
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- A monument has an initial cost of $300,000 and a duration of 35 years. Every 35 years the monument will be replaced with a matching monument that will also cost $300,000. These replacement cycles will continue because you want to have a monument forever. Calculate the capitalized cost, assuming 5% interest.A new boiler was installed by a textile plant at a total cost P300,000 and project to have a useful life of 15 years. At the end of its useful life, it is estimated to have a salvage value of P30,000. Determine the capitalized cost if interest is 18% compounded annually.A new engine was installed by a textile plant at cost of P and projected to have a useful life of 10 years. At the end of its useful life, it is estimated to have a salvage value of P22,000. The capitalized cost is P360,000. Determine the first cost P if interest is 14% compounded annually. Express answer in whole number
- At 6%, find the capitalized cost of a bridge whose cost is P250M and life is 20 years, if the bridge must be partially rebuilt at a cost of P100M at the end of each 20 years. The maintenance cost for a sewing machine this year is expected to be P500. The cost will increase P50 each year for subsequent 9 years. The interest is 8%. What is the approximate present worth of maintenance for the machine over the full 10 year period?Charlie has a project for which he had determined a present worth of $56,620. He now has to calculate the IRR for the project, but unfortunately he has lost complete information about the cash flows. He knows only that the project has a five-year service life and a first cost of $190,000, that a set of equal cash flows occurred at the end of each year, and that the MARR used was 10 percent. What is the IRR for this project?At 6% interest rate, find the capitalized cost of a building whose cost is ₱250,000,000with a life of 20 years. The building must be partially rebuilt at a cost of ₱130,000,000 atthe end of each 20 years.
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- A company is considering establishing a new machine to automate a meatpacking process. The machine will save $59,350 in labor annually. The machine can be purchased for $271,296 today and will be used for 8 years. It has a salvage value of $11,071 at the end of its useful life. The new machine will require an annual maintenance cost of $9,594. The corporation has a minimum rate of return of 9.4%. Calculate the NPW.Combined-cycle power plants use two combustion turbines to produceelectricity. Heat from the first turbine’s exhaust is captured to heatwater and produce steam sent to a second steam turbine thatgenerates additional electricity. A 968-megawatt combined-cycle gasfired plant can be purchased for P450 million, has no salvage value,and produces a net cash flow (revenues less expenses) of P50 millionper year over its expected 30-year life.a. If the hurdle rate (MARR) is 14% per year, how profitable aninvestment is this power plant?b. What is the simple payback period for the plant? Is this investmentacceptable?Consider an investment project with the following repeating cash flow patternevery four years forever: What is the annual-equivalence amount of this project at an interest rate of 14 %?