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Business, 02.11.2020 16:50 HalpMehPlz

Consider the determination of whether a worthwhile enterprise should be developed now, or at a later date. Consider a hydro-electric scheme, which if fully developed now will cost $70,000,000, and will have annual operating and maintenance costs averaging $3,500,000. However, if a first stage only is built now for $40,000,000, and the balance in 20 years time, the cost of the latter would then be $39,000,000; and the annual operation and maintenance will be $2,400,000 for the first 20 years and $4,000,000 thereafter. If the interest rate is 6% and the total life 40 years, which is the better alternative

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