# Beaver, a city in the United States, is attempting to attract a professional soccer team. Beaver is planning to build a new stadium that will cost \$340 million. The annual upkeep is expected to amount to \$850,000. The turf will have to be replaced every 11 years at a cost of \$980,000. Painting every 6 years will cost \$82,000. If the city expects to maintain the facility indefinitely, what is the estimated capitalized cost at i = 8% per year?The estimated capitalized cost is \$.......

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Beaver, a city in the United States, is attempting to attract a professional soccer team. Beaver is planning to build a new stadium that will cost \$340 million. The annual upkeep is expected to amount to \$850,000. The turf will have to be replaced every 11 years at a cost of \$980,000. Painting every 6 years will cost \$82,000. If the city expects to maintain the facility indefinitely, what is the estimated capitalized cost at i = 8% per year?

The estimated capitalized cost is \$.......

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Step 1

As per the question, except the initial cost, all the other costs will continue for longer periods. We can determine the present values using formulas as shown below:

Step 2

Present value of intial cost is \$340 million or \$340000000

Step 3

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