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Quiz_9 - 8 8366 Quiz 9,A Fall'09 Name Sza-V"4 1(50)w hat i...

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88366 Quiz 9,A, Fall'09 Name Sza.-V "4 1(50%) what is the equivalent first cost ofa civil works project requiring an initial investment of$90,000 and $40,000 mainten*r. "rp"rrr., occur.ing onc-e every g years forever? Assume that the first maintenanc" e*p.ns. or"*s at the end of year g. use aa annual interest rate of 10% per year with annual comooundins. ( r + i Eq- o 4u: tru.* _4t A/<-L a, /) + 4 4 1 /a/ ?{8 ) -==:: EFc- = 4oraao 7 eE 7- fl* Iorato ,v.F<a.re<. '/g / ) : ( ," +) -, ,or. * /./*sL 'r:3t = Qor 4lQ I t/D, atr-D = t . / * 1 6 = +4o+a(t/ F t 8) = 3t?2.?L EFc -- Sore*o 3*s7.+L a . t 2(50%) Consider the following two mutually exclusive investment projects: n Project A project B 0 -40.000 _50.000 I 35,000 51,000 2 34,000 36,000 3 30,000 0 Assume that i = 12% with annual compounding. which project would you select if you usean infinite planning horizon with projectrepeatability (same costs and benefits) likely? //rr'27 d 63t--- [email protected] >,,*//f/e fo ,vPd : a l q n/Pt)r= (-+0,*u *'59 * :ry. t# )( , * f,r,) =#Cq/tr I//2LJB= ( -ro,rto*+f + ?,%Y,* la,* ir.)= {rg,arC :. CL-oos. fy'l 4
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88366 Quiz 9B ( t + Aet : z * = 1(50%) Yo'r rich uncle has established
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