Problem 2 Waller County is planning to construct a Multi-million dollar Recreation and Museum centers some tens of miles away from Prairie View A & M University to facilitate Tourism in the City of Prairie View. The first cost for the center will amount to $15, 000,000. Annual maintenance and repairs will amount to $55,000 for each of the first six years, to $65,000 for each of the next twelve years, and to $70,000 for each of the next six years. At the end of the 24th year, $50,000 is estimated to be deposited into Waller county account as tax credits earned for its environmental compliance in the construction and operation of the center. In addition a major overhaul costing $850,000 will be required at the end of the thirteenth year. Use an interest rate of 7% and determine: a) Determine the engineering economy symbols and their value for each option. b) Construct the cash flow diagram c) Determine the total Annual Worth for the Project d) What is the Future worth of this project

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
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Problem 2
Waller County is planning to construct a Multi-million dollar Recreation and Museum centers
some tens of miles away from Prairie View A & M University to facilitate Tourism in the City of
Prairie View. The first cost for the center will amount to $15, 000,000. Annual maintenance and
repairs will amount to $55,000 for each of the first six years, to $65,000 for each of the next
twelve years, and to $70,000 for each of the next six years. At the end of the 24th year, $50,000
is estimated to be deposited into Waller county account as tax credits earned for its
environmental compliance in the construction and operation of the center. In addition a major
overhaul costing $850,000 will be required at the end of the thirteenth year. Use an interest rate
of 7% and determine:
a) Determine the engineering economy symbols and their value for each option.
b) Construct the cash flow diagram
c) Determine the total Annual Worth for the Project
d) What is the Future worth of this project
Transcribed Image Text:Problem 2 Waller County is planning to construct a Multi-million dollar Recreation and Museum centers some tens of miles away from Prairie View A & M University to facilitate Tourism in the City of Prairie View. The first cost for the center will amount to $15, 000,000. Annual maintenance and repairs will amount to $55,000 for each of the first six years, to $65,000 for each of the next twelve years, and to $70,000 for each of the next six years. At the end of the 24th year, $50,000 is estimated to be deposited into Waller county account as tax credits earned for its environmental compliance in the construction and operation of the center. In addition a major overhaul costing $850,000 will be required at the end of the thirteenth year. Use an interest rate of 7% and determine: a) Determine the engineering economy symbols and their value for each option. b) Construct the cash flow diagram c) Determine the total Annual Worth for the Project d) What is the Future worth of this project
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