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Problem #14 A grain elevator has “short lived” components which require replacing every 5 years.  The cost...

Problem #14

A grain elevator has “short lived” components which require replacing every 5 years.  The cost is estimated at $60,000.00.  What amount should be budgeted annually to a 10% sinking fund to allow for recapture?

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Answer #1

Annual amount to be deposited = 60000 * (A/F,10%,5) = 60000 * 0.163797 = 9827.82 ~ 9828

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