A newly constructed water treatment facility cost $2 million. It is estimated that the facility will need renovating every 30 years at a cost of $1 million. Annual repairs and maintenance are estimated to be $100,000 per year. At an interest rate of 6%, determine the capitalized cost of the facility.

Mr. Dubey • 52.26K Points
Coach

Q. A newly constructed water treatment facility cost $2 million. It is estimated that the facility will need renovating every 30 years at a cost of $1 million. Annual repairs and maintenance are estimated to be
$100,000 per year. At an interest rate of 6%, determine the capitalized
cost of the facility.

(A) 3579806

(B) 3877482

(D) 3360343

Correct : Option (B)