5) (17 points) Maintenance costs for a flood control project follow a cyclical pattern with the following annual costs o

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5 17 Points Maintenance Costs For A Flood Control Project Follow A Cyclical Pattern With The Following Annual Costs O 1 (257.08 KiB) Viewed 35 times

5) (17 points) Maintenance costs for a flood control project follow a cyclical pattern with the following annual costs occurring over a 6-year period. There is also an additional upgrade cost at the end of every 6 years as shown below. Interest rate is 5% per year compounded annually. End of Year 1 Cost $150,000 2 $225,000 3 $300,000 4 $375,000 5 $450,000 6 $600,000+ $1,500,000 a) (14 points) Compute an equivalent annual cost for a single 6-year cycle of maintenance and upgrade costs. b) (3 points) Assuming that the cyclic pattern of maintenance and upgrade costs repeats forever, how much money should be set aside initially for the perpetual maintenance and upgrading of the flood control project?