Some particulars for a project are as follows. Initial Capital Cost in year 0 ($Mn) Follow-up 'one-off cost in year 1 |($Mn) 1000 300 10% of capital Annual Operating Cost ($Mn/yr) cost Annual Benefits ($Mn/yr) Project Closure Cost, at end of project life ($Mn) Useful Life (years) Interest/Discount rate (percent) 400 200 20 7 What is the Life Cycle Cost of the project - with year 10 as the base year? (your answer must be rounded off to the nearest million dollars, i.e., no decimal places)
Some particulars for a project are as follows. Initial Capital Cost in year 0 ($Mn) Follow-up 'one-off cost in year 1 |($Mn) 1000 300 10% of capital Annual Operating Cost ($Mn/yr) cost Annual Benefits ($Mn/yr) Project Closure Cost, at end of project life ($Mn) Useful Life (years) Interest/Discount rate (percent) 400 200 20 7 What is the Life Cycle Cost of the project - with year 10 as the base year? (your answer must be rounded off to the nearest million dollars, i.e., no decimal places)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 22E
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