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The purchase of a motor for $7,398.74 and a generator for $5,987.69 will allow a company to produce its own energy. The configuration can be assembled for $1,123.35. The service will operate for 3,287.14 hours/year for 10 years. The maintenange cost is $300/year, and the cost to operate is $0.85/h for fuel and related costs. There is $821.74 in salvage value for the system at the end of 10 years. Using straight line depreciation, what is the annual cost for the operation?

The purchase of a motor for $7,398.74 and a generator for $5,987.69 will allow a company to produce its own energy. The configuration can be assembled for $1,123.35. The service will operate for 3,287.14 hours/year for 10 years. The maintenange cost is $300/year, and the cost to operate is $0.85/h for fuel and related costs. There is $821.74 in salvage value for the system at the end of 10 years. Using straight line depreciation, what is the annual cost for the operation?

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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The purchase of a motor for $7,398.74 and a generator for $5,987.69 will allow a company to produce its own energy. The configuration can be assembled for $1,123.35. The service will operate for 3,287.14 hours/year for 10 years. The maintenange cost is $300/year, and the cost to operate is $0.85/h for fuel and related costs. There is $821.74 in salvage value for the system at the end of 10 years. Using straight line depreciation, what is the annual cost for the operation?
Transcribed Image Text:The purchase of a motor for $7,398.74 and a generator for $5,987.69 will allow a company to produce its own energy. The configuration can be assembled for $1,123.35. The service will operate for 3,287.14 hours/year for 10 years. The maintenange cost is $300/year, and the cost to operate is $0.85/h for fuel and related costs. There is $821.74 in salvage value for the system at the end of 10 years. Using straight line depreciation, what is the annual cost for the operation?
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