jessicalynn3292
Sep 20, 2012, 07:40 PM
surface and maintain a lot for 10 years. 12,700 square yards
Bid A: 5.79 per square yard. Has to be replaced at the end of 5 years. Annual maintenance is .28cents per square yard for each year except last year of service. Replacement surface is similar to initial surface.
Bid B: 10.59 per square yard. Last 10 years. Annual maintenance is .11cents per square yard for each year except last year of service.
Calculate the present value outflows for both bid a and b. cost of capital is 10% and the annual maintenance expenditures are incurred at the end of each year, and that prices are not expected to change during the next 10 years.
Bid A: 5.79 per square yard. Has to be replaced at the end of 5 years. Annual maintenance is .28cents per square yard for each year except last year of service. Replacement surface is similar to initial surface.
Bid B: 10.59 per square yard. Last 10 years. Annual maintenance is .11cents per square yard for each year except last year of service.
Calculate the present value outflows for both bid a and b. cost of capital is 10% and the annual maintenance expenditures are incurred at the end of each year, and that prices are not expected to change during the next 10 years.