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A new municipal power plant is being built in Highfill, AR. The initial installation will cost $25 million. Experience shows that major repair and renovation will have to occur every 5 years at a cost of $7.5 million. Annual operating and maintenance cost the first year will be approximately $2.5 million; thereafter, O&M cost increases at a rate of 5% per year. Based on a 5% time value of money, what will be the capitalized cost for the power plant?

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91961120

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