Painting currently costs $15,000 today and would have to be done every 5 years. -- Future painting costs would increase
Posted: Fri Jul 01, 2022 8:48 am
Painting currently costs $15,000 today and would have to be done every 5 years.
-- Future painting costs would increase with the rate of inflation, which is expected to be 6% annual.
--In order to proceed with painting, some walls need a one-time repair for a cost of $2,000
--With these repairs the walls are expected to last for 25 years.
Vinyl siding that can be installed over wall (without repairs) at a costs $60,000 and is maintenance free with an expected life of 25 years.
--This work is to be financed by withdrawing funds from investments where they are expected to earn an average interest of 10% annual.
-From a financial point of view, which is the preferred alternative?
-- Future painting costs would increase with the rate of inflation, which is expected to be 6% annual.
--In order to proceed with painting, some walls need a one-time repair for a cost of $2,000
--With these repairs the walls are expected to last for 25 years.
Vinyl siding that can be installed over wall (without repairs) at a costs $60,000 and is maintenance free with an expected life of 25 years.
--This work is to be financed by withdrawing funds from investments where they are expected to earn an average interest of 10% annual.
-From a financial point of view, which is the preferred alternative?