A milling machine was purchased for $65,000. It is anticipated that its salvage value of $7,500 will realized after 7 years. During this time its average annual revenue totaled $18,000 and annual operating and maintenance (O&M) cost was $1,800 the first year and expected to increase by a constant amount of $500 per year. Calculate its capital recovery cost at an interest rate of 8%. Select one:

A milling machine was purchased for $65,000. It is anticipated that its salvage value of $7,500 will realized after 7 years. During this time its average annual revenue totaled $18,000 and annual operating and maintenance (O&M) cost was $1,800 the first year and expected to increase by a constant amount of $500 per year. Calculate its capital recovery cost at an interest rate of 8%. Select one:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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