X hits on this document

32 views

0 shares

0 downloads

0 comments

6 / 16

Solution

If the project were delayed, it’s cost next year will be:

$100 million +$8.5 million = $108.5 million next year

Compare this amount to the cost of replacing now- stated in dollars next year using the interest rate of 4%:

$100 million × ($1.04 next year/$1 now) = $104 million next year

The cost of a one year delay would be:

$108.5 million – $104 million = $4.5 million next year (future value)

Document info
Document views32
Page views32
Page last viewedTue Dec 06 14:50:14 UTC 2016
Pages16
Paragraphs197
Words1100

Comments