A machine, which costs $100,000 when new, has a 15- year lifetime and a salvage value equal to 20% of its original value. Determine the capital recovery costs, based on an interest rate of 10% per year, compounded annually. a. $13,777 b. $21,111 c. $12,833 d. $12,518

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 2P
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A machine, which costs $100,000 when new, has a 15-
year lifetime and a salvage value equal to 20% of its
original value. Determine the capital recovery costs,
based on an interest rate of 10% per year,
compounded annually.
a. $13,777
b. $21,111
c. $12,833
d. $12,518
Transcribed Image Text:A machine, which costs $100,000 when new, has a 15- year lifetime and a salvage value equal to 20% of its original value. Determine the capital recovery costs, based on an interest rate of 10% per year, compounded annually. a. $13,777 b. $21,111 c. $12,833 d. $12,518
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