# 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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## This note was uploaded on 04/11/2010 for the course MST 502 taught by Professor Atals during the Spring '10 term at SUNY IT.

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

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