2. Please use the formula provided to answer the solution Legend:Cc - Capitalized Cost (Currency)Fc - First Cost (Currency)Mc - maintenance Cost (Currency)Rc - Replacement Cost (Currency); if no Re: Re FeSy- Salvage Value (Curency); if no Sy: Sy = 0A - Periodic Amount (Currency)F-Future Value (Currency)G - Periodic Amount Increment Amount (Currency)P - Present Value (Currency)g - Periodic Amount Increment Rate (Persentage)i-Nominal Interest Rate (Percent)m - Number of Periods per Year (Number)r - Effective Interest Rate (Percent)t-Number of Years (Number)Formulae:Perpetuity (t=00):Compounding Transformation (i, (m₂)→ 1₂ (m₂)): (1 + ) = (1 +)**Arithmetic Gradient:Ordinary Annuity (Payment at End of Period):P=A1-(1+1)-²)Geometric Gradient:Capitalized Cost:n = mtr=-F=AAnnuity Due (Payment at Beginning of Period):mF = P(1+r)"P = F(1+r)-RF=AF== A ((1+r)^²-1)P=A (1-(1+r)^)(1+r)= A (¹ + r)² - 1) (1 + r)TFA[(1+r)-1]G[-nr + (1+r)" - 1]Tr2A[(1+r)"-(1+g)"]T-9Re-SyCc=Fc++ (1+r)"-1A = Cer The contract of a new public-private partnership (PPP)project has been signed to lease a building at P20,000per year with an annual increase of P1,500 for 8years. Payments are to be made at the end of eachyear, starting one year from now. The prevailinginterest rate of money is 7%. What lump sum paidtoday would be equivalent to the 8-year leasepayment plan of the PPP project?Add your answer

# Payments would be made at the end of year in the next 8 years. # First payment would be 20,000…

The contract of a new public-private partnership (PPF project has been signed to lease a building at P20,000 per year with an annual increase of P1,500 for 8 years. Payments are to be made at the end of each year, starting one year from now. The prevailing interest rate of money is 7%. What lump sum paid today would be equivalent to the 8-year lease

The contract of a new public-private partnership (PPF project has been signed to lease a building at P20,000 per year with an annual increase of P1,500 for 8 years. Payments are to be made at the end of each year, starting one year from now. The prevailing interest rate of money is 7%. What lump sum paid today would be equivalent to the 8-year lease

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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