The property appraisal district for Marin County has just installed new software to track residential market...

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Economics

The property appraisal district for Marin County has justinstalled new software to track residential market values forproperty tax computations. The manager wants to know the totalequivalent cost of all future costs incurred when the three countyjudges agreed to purchase the software system. If the new systemwill be used for the indefinite future, find the equivalent value(a) now and (b) for each year hereafter. The system has aninstalled cost of $2,500,000 and an additional cost of $700,000 atyear 8. The annual software maintenance contract cost is $75,000for the first 4 years, $100,000 for the second 4 years, $125,000for the third 4 years, and $125,000 thereafter. In addition, thereis expected to be a recurring major upgrade cost of $100,000 every14 years. Assume that i= 7% per year for county funds

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3.6 Ratings (510 Votes)

As per the details given above Installation Cost 2500000 Present Value of Additional Cost 700000 1 078 700000 062275 43592482 The computation of Annual See Answer

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