calculate the PVIFA
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The cost associated with maintaining rural highways follows a predictable pattern. There are usually no costs for the first 3 years, but thereafter maintenance is required for restriping, weed control, light replacement, shoulder repairs, etc. For one section of a particular highway, these costs are projected to be $6000 in year 3, $7000 in year 4, and amount increasing by $1000 per year through the highway's expected 30-year life. Assuming it is replaced with a similar roadway, what is the perpetual equivalent annual worth (in years 1 through infinity) at an interest rate of 8% per year?
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The expert calculates the PVIFA.
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Interest Rate 8%
First calculate the PV of cash flows associated with the ...
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