CH.5 - 5.7 Capitalized cost represents the present worth of...

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5.7 Capitalized cost represents the present worth of service for an infinite time. Real world examples that might be analyzed using CC would be any bridge in the U.S. or any of the national parks. 5.9 n NCF(A) Salvage(A) NCF(B) Salvage(B) 0 $(80,000.00) $- $(120,000.00) $- 1 $(30,000.00) $- $(8,000.00) $- 2 $(30,000.00) $- $(8,000.00) $- 3 $(15,000.00) $15,000.00 $32,000.00 $40,000.00 PW(A) = 5.13 n NCF(JX) Salvage(JX) NCF(KZ) Salvage(KZ) 0 $(205,000.00) $- $(235,000.00) $- 1 $(29,000.00) $- $(27,000.00) $- 2 $(27,000.00) $2,000.00 $(27,000.00) $- 3 $(27,000.00) $- 4 $(7,000.00) $20,000.00 PW(JX) = PW(JX) @ 4 yr = PW(KZ) @ 4 yr = 5.17 10% n NCF(solar) NCF(New Line) PW(solar) PW(New line) 0 $(12,600.00) $(11,000.00) $(12,600.00) $(11,000.00) 1 $(1,400.00) $(800.00) $(1,272.73) $(727.27) 2 $(1,400.00) $(800.00) $(1,157.02) $(661.16) 3 $(1,400.00) $(800.00) $(1,051.84) $(601.05) 4 $(1,400.00) $(800.00) $(956.22) $(546.41) F/P = 1.46 PW(solar) = $(17,037.81) PW(New Line) = $(13,535.89) 5.21 12%
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n NCF(A) NCF(B) PW(A) PW(B) 0 $(300,000.00) $(1,200,000.00) $(300,000.00) $(1,200,000.00) 1 $(900,000.00) $50,000.00 $(803,571.43) $44,642.86 2 $(900,000.00) $50,000.00 $(717,474.49) $39,859.69 3 $(900,000.00) $50,000.00 $(640,602.22) $35,589.01 4 $(900,000.00) $50,000.00 $(571,966.27) $31,775.90 5 $(900,000.00) $50,000.00 $(510,684.17) $28,371.34 6 $(900,000.00) $50,000.00 $(455,968.01) $25,331.56 7 $(900,000.00)
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CH.5 - 5.7 Capitalized cost represents the present worth of...

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