Financial information about a dam project is presented in the table below.Initial investment cost ($)340,000Operation-maintenance expenses (annual) ($)57,000High repair-maintenance cost (at 10th year) ($)411,000Salvage value ($)44,000Economic life of the dam25 yearsAnnual interest rate15%The kilowatt hour (kWh) of electricity will be sold at $0.45. Under these conditions, how much electricity should the dam produce annually to cover the construction costs?

Present worth refers to the current value of a future cash flow or series of cash flows. It is…

Answered: Financial information about a dam…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Financial information about a dam project is presented in the table below.

Initial investment cost ($)	340,000	Operation-maintenance expenses (annual) ($)	57,000
High repair-maintenance cost (at 10th year) ($)	411,000	Salvage value ($)	44,000
Economic life of the dam	25 years	Annual interest rate	15%

The kilowatt hour (kWh) of electricity will be sold at $0.45. Under these conditions, how much electricity should the dam produce annually to cover the construction costs?

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