Question

An oil company is planning to extend a pipeline. The initial cost is $1500, and annual...

An oil company is planning to extend a pipeline. The initial cost is $1500, and annual maintenance is expected to be $400. Costs of operating the pump are estimated to be $1500 per year. At an interest rate of 8%, what most nearly is the total capitalized cost of the pipeline extension?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A natural gas pipeline currently has annual operating & maintenance costs of $40k. A new pipeline...
A natural gas pipeline currently has annual operating & maintenance costs of $40k. A new pipeline would initially cost $100k, but would reduce the annual O&M costs to $10k per year. Assuming an analysis period of 25 years, no salvage value for either pipeline, and an interest rate of 6%, what's the difference in EUAC between the existing pipeline and the new pipeline, rounded to the nearest whole dollar amount?
Consider a heat pump purchase with the following details: * Initial cost: 20,000 USD * Annual...
Consider a heat pump purchase with the following details: * Initial cost: 20,000 USD * Annual savings: 3,000 USD for 20 years * Annual maintenance costs: 250 USD for 20 years * Estimated salvage value: 500 USD at the end of 20 years (a) If the interest rate is 10%, what is the net present worth of this heat pump? (b) Calculate the simple payback period of the heat pump. (c) Calculate the Benefit/Cost ratio of the heat pump purchase....
Consider a heat pump purchase with the following details: * Initial cost: 15,000 USD * Annual...
Consider a heat pump purchase with the following details: * Initial cost: 15,000 USD * Annual savings: 2,500 USD for 25 years * Annual maintenance costs: 150 USD for 25 years * Estimated salvage value: 300 USD at the end of 25 years (a) If the interest rate is 12%, what is the net present worth of this heat pump? (b) Calculate the simple payback period of the heat pump. (c) Calculate the Benefit/Cost ratio of the heat pump purchase....
Consider a heat pump purchase with the following details: * Initial cost: 20,000 USD * Annual...
Consider a heat pump purchase with the following details: * Initial cost: 20,000 USD * Annual savings: 3,000 USD for 20 years * Annual maintenance costs: 250 USD for 20 years * Estimated salvage value: 500 USD at the end of 20 years (a) If the interest rate is 10%, what is the net present worth of this heat pump? (b) Calculate the simple payback period of the heat pump. (c) Calculate the Benefit/Cost ratio of the heat pump purchase....
1. A new bridge with a 100-year life is expected to have an initial cost of...
1. A new bridge with a 100-year life is expected to have an initial cost of Birr 20 million. This bridge must be resurfaced every five years, at a cost of Birr 1 million. The annual inspection and operating costs are estimated to be Birr 50 000. Determine the present-worth cost of the bridge using the capitalized equivalent approach (i.e., take the life of the bridge as infinite). The interest rate is 10% per year, compounded annually.
A city is considering building a bridge with an initial cost of $85,000 and expected useful...
A city is considering building a bridge with an initial cost of $85,000 and expected useful life of 30 years. Annual maintenance and benefits are $10,000 and $13,000, respectively. The benefit-cost ratio using a 4% interest rate is most nearly: a) 0.87, b)1.01, c)1.15 or d)1.30
1. A public project is considered to extend irrigation canals into a desert area. The initial...
1. A public project is considered to extend irrigation canals into a desert area. The initial cost of the project is expected to be $1.5 million, with annual maintenance costs of $25,000 per year. Agricultural revenue is expected to be $175,000 per year, the canal must be dredged every 3 years at a cost of $60,000 and there is a $15,000 per year disbenefit associated with the project. (a) Set up the spreadsheet and (b) use hand calculations to calculate...
Alternative A has an initial acquisition cost of $10,000 and an annual average operating and maintenance...
Alternative A has an initial acquisition cost of $10,000 and an annual average operating and maintenance cost of $1402 per down time. Alternative B has a higher acquisition cost of $20,000, but has a lower annual average operating and maintenance cost of $500 per down time. With an expected lifetime of 5 years for both alternatives, and an annual interest of 5%, determine the break even number of down times per year. please show all work
Acme has invested in a machine to enhance the worker's productivity and job enrichment. The company...
Acme has invested in a machine to enhance the worker's productivity and job enrichment. The company purchased the machine for $92,529 that has an expected useful life of 13 years and a salvage value of $18,470. If the operation and maintenance costs are estimated to be $4,520 per year over the machine's life, and assuming an interest rate of 0.11 per year, the annual equivalent cost of owning the machine is most nearly.
Which of the following is closest to the capitalized cost of an initial investment of $200,000,...
Which of the following is closest to the capitalized cost of an initial investment of $200,000, refurbishment costs of $50,000 every five years, and annual operating costs of $25,000 continuing forever? Assume an interest rate of 6% per year. $350,000 $620,000 $760,000 $860,000
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT