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e355t1q4

# e355t1q4 - Spending = = per guest 25,000 x 95.00 Spending =...

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E355-Spring08-Test1-Sol 1.4 Assume a MARR of 18% and an infinite life. a) Find the capital recovery costs with infinite life [7 point] CR = Pi CR = 45,000 \$ X (A/P, 18%, ) CR = 45,000 \$ X 0.18 CR = \$8,100 * Note: (A/P, i, N) = i , when N approachs . See page 144 on textbook. b) Find the capitalized cost [7 point] CC= P + A(P/A, I, N) + F(A/F, I, N)(P/A, I, N) CC = 45,000 + 5,000 X (P/A, 18%, ) + 3,000.0 X (A/F,18%,12) (P/A,18%, ) CC = 45,000 + 5,000 X 1/0.18 + 3,000.0 X 0.0286 1/0.18 CC = \$73,254.44 * Note: (P/A, i, N) = 1 / i , when N approachs . See page 144 on textbook. c) Calculate the total annual cost. [7 point] Hint: Use capital recovery and annual maintenance cost Total annual cost = Capital Recovery + Annual maintenance cost Total annual cost = 8,100 + 5,000 Total annual cost = \$13,100 / year d) Based on the result from part c, what would the average price per guest to cover the total annual costs? (3 points)
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Unformatted text preview: Spending = = per guest 25,000 x 95.00% Spending = \$0.55 per guest \$13,100 Total cost per year People per year Las Vegas Tours is planning to add another tour for their guests. They will need to decide how much they should set the per guest price of a tour stay to account for the investment. The initial cost for this tour project is going to be \$45,000, as well as annual O&M costs of \$5000. In addition to this, there will also be upgrade costs every 12 years of \$ 3000. Their capacity is 25,000 guests a year and they generally work at a rate of 95% of their capacity. = ∞ ∞ ∞ ∞ ∞ E355-Spring08-Te