Calculate annualized cost of resurfacing-minor maintenance
Course:- Microeconomics
Reference No.:- EM13700147

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Microeconomics

The cost of paving a new multi-use trail is $1.7 million. Minor repairs and up-keep will cost $100,000 per year. Every 10 years the trail will need a major re-surfacing at a cost of $850,000. These costs will continue indefinitely.

a. Calculate the annualized cost (EUAC) of the resurfacing and minor maintenance over the first 10 years of the project’s life if i = 12%. Ignore the initial paving cost.


b. Based on the EUAC from part (a) above, calculate the capitalized cost (P) of the project over its infinite life including the initial paving cost. Remember that the initial cost is in present dollars and is part of the capitalized cost of the project.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Microeconomics) Materials
As a manager, what are some practical things you could do to raise marginal product per employee that also benefit the firm? In your answer use a company you currently work fo
Assume that contributions to an IRA account in excess of 10 percent of income are tax deductible. Use a two-period diagram to show the budget constraint. Explain why this fo
An editorial in the Wall Street Journal states: "We don't put much stock in future budget forecasts because they depend on so many variables." What variables would a forecas
Decribe how the Bank of Canada can affect interest rates and money supply in Canada. Be specific about the tools that are available to the Bank for such purposes.
Determine what do the laws of supply and demand forecast would be the result of an immediate removal of rent control in terms of price of rental housing and quantity available
Conduct research about the demographics of your community, for example the population size and average income per household and other independent variables, such as price of
5. Explain how the factors below contributed to the subprime meltdown.(a) Financial innovations in the mortgage markets.(b) Agency problems.(c) Information problems Briefly d
According to a study of US cigarette sales among 1955 and 1985, when the price of cigarettes was one percent higher, consumption would be 0.4 percent lower in the short run an