Determine the capitalized cost of a permanent roadside historical marker that has a first cost of...

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Question

Determine the capitalized cost of a permanent roadside historical marker that has a first cost of $52,500 and a maintenance c

Answer 1

Answer #1

Answer:

We have the following information

One time cost = $52,500

Maintenance Cost = $3,700 once every 7 years

Interest rate (i) = 14% per year or 0.14

Capitalized cost = – 52,500 – (3,700(A/F, 14%, 7)/0.14)

Find the value of (A/F, 14%, 7) from Compound interest table

(A/F, 14%, 7) = 0.0932

Capitalized cost = – 52,500 – (3,700 × 0.0932)/0.14)

Capitalized cost = – 52,500 – 2463.1428

Capitalized Cost = – $50,036.8572

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Answer 2

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