Reproduction Cost
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A 4-year-old building that originally cost $100,000 burned down. The rate of inflation of building costs has been 5 percent per annum. The current reproduction cost of the building is
a. $121,550.
b. $120,000.
c. $83,333.
d. $82,304.
e. $100,000.
You've just won the $25 million lottery. You are going to receive a check for $1 million dollars today and at the end of every year for the next 24 years. If the interest rate is 10 percent, the present value of your prize is
a. $8,984,744.
b. $9,984,744.
c. $12,984,744.
d. $20,000,000.
e. $25,000,000.
If the annual interest rate is i, the present value of $X to be received at the end of each future year forever is
a. $X / (1 + i).
b. $X / i.
c. $X / (1 + i)n.
d. $X / i n.
e. $Xn / i n.
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Reproduction cost is determined in the solution.
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A 4-year-old building that originally cost $100,000 burned down. The rate of inflation of building costs has been 5 percent per annum. The current reproduction cost of ...
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