An item costs $12000. The businesswill need to replace this item every 9years at the same cost. If money isworth 7.75% compounded annually,state the capitalized cost of the item.Use standard rules of rounding.

Capitalised cost is the present value of all costs associated with owning and maintaining the item…

Answered: An item costs $12000. The business will…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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An item costs $12000. The business will need to replace this item every S years at the same cost. If money is worth 7.75% compounded annually, state the capitalized cost of the item Use standard rules of rounding.