At an interest rate of 10% per year, the capitalized cost of $10,000 in year 0, $5000
Question:
At an interest rate of 10% per year, the capitalized cost of $10,000 in year 0, $5000 per year in years 1 through 5, and $1000 per year thereafter forever is closest to:
(a) –$29,652
(b) –$35,163
(c) –$38,954
(d) –$43,221
The interest rate is 10% peryear.
Transcribed Image Text:
Machine X Machine Y Initial cost, $ Annual operating cost, $ per year20,00 Salvage value, S Life, years 80,000 -95,000 -15,000 30,000 10,000
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Present value for all capatilized costs is sum of capitalized cost now ie 10000 ...View the full answer
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