A company is building a new facility and needs to allocate a budget for maintenance and operation. If the initial construction cost is $500,000, and maintenance costs are 5% of the construction cost annually, while operational costs are $25,000 annually, what will be the total cost of operating the facility for 10 years?

Select one:

a. $625,000

b. $800,000

c. $750,000

d. $700,000

We need to calculate the total cost of operating the facility for 10 years, which includes both maintenance and operational costs.

### Given:
- Initial construction cost: \$500,000
- Maintenance costs: 5% of the construction cost annually
- Operational costs: \$25,000 annually
- Time period: 10 years

### Steps:

1. **Calculate annual maintenance cost**:
   \[
   \text{Maintenance cost} = 5\% \times 500,000 = 0.05 \times 500,000 = 25,000
   \]

2. **Annual total costs**:
   - Maintenance cost: \$25,000
   - Operational cost: \$25,000
   - Total annual cost = \$25,000 (maintenance) + \$25,000 (operation) = \$50,000

3. **Total cost over 10 years**:
   \[
   \text{Total cost for 10 years} = 10 \times 50,000 = 500,000
   \]

4. **Add the initial construction cost**:
   \[
   \text{Total cost} = 500,000 (\text{initial cost}) + 500,000 (\text{cost over 10 years}) = 1,000,000
   \]

Thus, **none of the provided options** seem to match the correct total of \$1,000,000.

Would you like to review or clarify the question further, or should I explain it more in-depth?

### Relative Questions:
1. How would the cost change if the maintenance percentage increased to 7% annually?
2. What would the total cost be for 15 years instead of 10?
3. How would the total change if the operational costs were \$30,000 annually?
4. How much would be saved if the operational costs were reduced by 10% annually?
5. What if the company managed to reduce construction costs by 10%?

**Tip:** Always break down complex financial calculations into simpler steps to ensure accuracy.

A company is building a new facility and needs to allocate a budget for maintenance and operation. If the initial construction cost is $500,000, and maintenance costs are 5% of the construction cost annually, while operational costs are $25,000 annually, what will be the total cost of operating the facility for 10 years? Select one: a. $625,000 b. $800,000 c. $750,000 d. $700,000

Learn how to estimate the total cost of running a facility over 10 years, including maintenance and operational expenses. This problem covers percentage calculations and cost estimation, ideal for students in Grades 9-12.

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