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Shashi Bhushan answered this


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Q-5

Cost of delay in 2005 dollar terms = R2005 - PV


(R 2006) = R2005 - R2006 / (1 + r)
= 2 - 1.6 / (1 + 8%) = $
0.51852 billion = $ 518.52 million

Q-6

Cost of delay in 2016 dollar terms = PV(C2017) -


C2016 = C2017 / (1 + r) - C2016 =
100 x (1 + 8.5%) / (1 + 4%) -
100 = $ 4.33 million

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Questions viewed by other students

Q: The cost of replacing a fleet of company trucks with more energy


efficient vehicles was $100 million in 2016. The cost
is estimated
to rise by 8.5% in 2017. If the interest rate is 4%, what is the
cost of a delay in terms of dollars in 2016?
A)
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B) $4.33 Million
C) $108.50 Million
D) $104.33 Million

A: See answer 100% (4 ratings)

Q: Suppose the cost of replacing the fleet of your company trucks


with more efficient vehicles was $100 million in 2016.
The cost is
estimated to rise by 2.5% annually until the end of 2018. If the
interest is 4%, what is the cost of a delay
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in terms of 2016 dollars?

A: See answer

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