The city of New Haven is trying to determine how big its capital budget needs...
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The city of New Haven is trying to determine how big its capital budget needs to be to pay for the construction and on-going maintenance of a new 5 mile stretch of highway. The section of highway is being built at an initial cost of $3.5 million. The maintenance and occasional resurfacing of the section of highway are expected to cost $460000 every 3 years. What is the capitalized cost of the highway at an interest rate of 7.5% per year? Note: capitalized cost is a negative number. Your
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