An investor is considering the construction of a new marina, Ask an Expert

Economics

An investor is considering the construction of a new marina on the Detroit river at a cost of $68m. M&O costs will average $80,000 per year for the first five years, and rise to $100,000 per year thereafter. A major overhaul costing $12m will be required at the end of the 15th year. The overhaul will be repeated (at the same cost) every 10 years thereafter. What is the capitalized cost of the marina if the interest rate is 4% per year?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91795845

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