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A machine which costs $100 000 when new has a lifetime of 15 years and a salvage value equal to 20% of its original cost. Determine the capital recovery for this machine, if the interest rate is 10% per year, compounded annually. Ans. $12517.60 per year Repeat Problem 7.25, using a salvage value equal to 5% of the machine's original cost. Ans. $12 989.56 per year

A machine which costs $100 000 when new has a lifetime of 15 years and a salvage value equal to 20% of its original cost. Determine the capital recovery for this machine, if the interest rate is 10% per year, compounded annually. Ans. $12517.60 per year Repeat Problem 7.25, using a salvage value equal to 5% of the machine's original cost. Ans. $12 989.56 per year

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please solve 7.26 on paper. Provide the formula used so I can understand the process from the beginning.not use excel

A machine which costs $100 000 when new has a lifetime of 15 years and a salvage value equal to 20% of its original cost. Determine the capital recovery for this machine, if the interest rate is 10% per year, compounded annually. 7.25 Ans. $12 517.60 per year Repeat Problem 7.25, using a salvage value equal to 5% of the machine's original cost. Ans. $12 989.56 per year 7.26
Transcribed Image Text:A machine which costs $100 000 when new has a lifetime of 15 years and a salvage value equal to 20% of its original cost. Determine the capital recovery for this machine, if the interest rate is 10% per year, compounded annually. 7.25 Ans. $12 517.60 per year Repeat Problem 7.25, using a salvage value equal to 5% of the machine's original cost. Ans. $12 989.56 per year 7.26
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