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Determine the capitalized cost of an alternative that has a first cost of $55,000 an annual maintenance cost of $12,000 and a cost every five years of $20,000.Use an interest rate of 11% per year. 109,091 193,286 217,650 225,000

Determine the capitalized cost of an alternative that has a first cost of $55,000 an annual maintenance cost of $12,000 and a cost every five years of $20,000.Use an interest rate of 11% per year. 109,091 193,286 217,650 225,000

Essentials Of Investments
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
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These question are related to costing, Please answer both parts Part-A) Determine the capitalized cost of an alternative that has a first cost of $55,000 an annual maintenance cost of $12,000 and a cost every five years of $20,000.Use an interest rate of 11% per year. 109,091 193,286 217,650 225,000 Part-B) An alternative for producing a pesticide will have a first cost of $400,000 and annual costs of $40,000. Income is expected to be $120,000 per year. What is the payback period at 0% per year interest? 3.5 years 4 years 4.5 years 5 years
Transcribed Image Text:These question are related to costing, Please answer both parts Part-A) Determine the capitalized cost of an alternative that has a first cost of $55,000 an annual maintenance cost of $12,000 and a cost every five years of $20,000.Use an interest rate of 11% per year. 109,091 193,286 217,650 225,000 Part-B) An alternative for producing a pesticide will have a first cost of $400,000 and annual costs of $40,000. Income is expected to be $120,000 per year. What is the payback period at 0% per year interest? 3.5 years 4 years 4.5 years 5 years
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