The purchase of a motor for $10,911.6 and a generator for $5,998.22 will allow a company to produce its own energy. The configuration can be assembled for $1,223.04. The service will operate for 2,619.56 hours/year for 10 years. The maintenance cost is $300/year, and the cost to operate is $0.85/h for fuel and related costs. There is $643.01 in salvage value for the system at the énd of 10 years. Using straight line depreciation, what is the annual cost for the operation?
The purchase of a motor for $10,911.6 and a generator for $5,998.22 will allow a company to produce its own energy. The configuration can be assembled for $1,223.04. The service will operate for 2,619.56 hours/year for 10 years. The maintenance cost is $300/year, and the cost to operate is $0.85/h for fuel and related costs. There is $643.01 in salvage value for the system at the énd of 10 years. Using straight line depreciation, what is the annual cost for the operation?
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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Transcribed Image Text:The purchase of a motor for $10,911.6 and a generator for $5,998.22 will allow a
company to produce its own energy. The configuration can be assembled for $1,223.04.
The service will operate for 2,619.56 hours/year for 10 years. The maintenance cost is
$300/year, and the cost to operate is $0.85/h for fuel and related costs. There is $643.01
in salvage value for the system at the énd of 10 years. Using straight line depreciation,
what is the annual cost for the operation?
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