Homework Answers
Answer :-
Capitalized cost the present worth of a constant annual cost over an infinite period of analysis.
Let the capitalized cost be P. Then,
P = $200,000+$40,000(P/A,15%,n=infinity)
P = $200,000+$40,000(1/0.15)
P = $200,000+$266,667 = $466,667
Thus, the capitalized cost will be $466,667
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