Homework Answers
| First Cost | $155,000.00 |
| Annual maintenance cost | $72,000.00 |
| Salvage Value | $78,000.00 |
| Life | 10 years |
| Interest rate | 6% per year |
| Capitalized Cost = [-$155000 (A/P, 6%,10) - $72000 + $78,000 (A/F, 6%, 10)] / 0.06 | |
| Capitalized Cost = [-$155,000 (1/7.36009)- $72,000 + $78,000 (1/13.1808)] / 0.06 | |
| = [-$155,000 * 0.1357587263 - $72,000 + $78,000 * 0.0758679291] / 0.06 | |
| = [-$21042.60 - $72,000 + $5917.70] / 0.06 | |
| = [-$87124.9 / 0.06] | |
| Capitalized Cost =-$1452081.66 | |
| Thus, Answer is very closed to$1452367 |
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