A mall with two levels is under construction. The plan is to install only 9 escalators at the start, although the ultimate design calls for 16. The question arises as to whether to provide necessary facilities (stair supports, wiring conduits, motor foundations, etc.) that would permit the installation of the additional escalators at the mere cost of their purchase and installation or to defer investment in these facilities until the escalators actually need to be installed. Additional annual expenses are estimated at $7,000 for each escalator after it's installed. Assume these costs begin one year after the installation. At an interest rate of 12%, compare the net present worth of each option over eight years. The two options are:
Option A Provide these facilities now for all seven future escalators at $300,000
Option B Defer the investment as needed. Install two more escalators in two years, three more in five years, and the last two in eight years. The installation of these facilities at the time they are required is estimated to cost $140,000 in year 2, $160,000 in year 5, and $180,000 in year 8
Additional annual expenses are estimated at $3000 for each escalator facility in- stalled. At an interest rate of 12%, compare the net present worth of each option over eight years
Answers: 3
Business, 21.06.2019 19:50, Taiyou
The u. s. stock market has returned an average of about 9% per year since 1900. this return works out to a real return (i. e., adjusted for inflation) of approximately 6% per year. if you invest $100,000 and you earn 6% a year on it, how much real purchasing power will you have in 30 years?
Answers: 2
Business, 22.06.2019 05:50, Haddixhouse8948
Match each of the terms below with an example that fits the term. a. fungibility the production of gasoline b. inelasticity the switch from coffee to tea c. non-excludability the provision of national defense d. substitution the demand for cigarettes
Answers: 2
A mall with two levels is under construction. The plan is to install only 9 escalators at the start,...
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