Solution :-
Present Value of Cost = [ - Purchase Cost - Annual Operating Cost * PVAF ( 8% , 6 ) + Salvage Value * PVF ( 8% , 6 ) ]
= [ - $46,000 - $28,000 * PVAF ( 8% , 6 ) + $3,600 * PVF ( 8% , 6 ) ]
= - $46,000 - ( $28,000 * 4.6229 ) + ( $3,600 * 0.6302 )
= - $173,172.02
Now Annual Capital Recovery = Present Value of Cost * A/P ( 8% , 6 )
= $173,172.02 * 0.2163
= $37,459.77
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