A new office building has been constructed at a cost of$3,000,000. It is estimated...

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Accounting

A new office building has been constructed at a cost of$3,000,000. It is estimated to have a life of 50 years with a valueat that time of $200,000. It will have maintenance costs of $10,000per year. It will also have major repairs costing $80,000 thatoccur at years 10, 20, 30 and 40. It will have additional repairsat the end of year 25 costing $250,000. Determine the equivalentuniform annual cost if the rate of interest of the firm is 7%

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The question is a case of TimeValue of MoneyWe need to assume some pointsbefore we go forward1All Costs are incurred at the beginning of the year2Compounding is annualFor solving the question we will See Answer

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In: AccountingA new office building has been constructed at a cost of$3,000,000. It is estimated to...A new office building has been constructed at a cost of$3,000,000. It is estimated to have a life of 50 years with a valueat that time of $200,000. It will have maintenance costs of $10,000per year. It will also have major repairs costing $80,000 thatoccur at years 10, 20, 30 and 40. It will have additional repairsat the end of year 25 costing $250,000. Determine the equivalentuniform annual cost if the rate of interest of the firm is 7%