When comparıng the two machines shown below using Capital Recovery method if MARR is 8%? What is the capital recovery for machine B? Machine A Machine B 1st Cost $12,000 8000 Operating cost/Yr 3500 2500 Salvage Value 3500 1000 Life 10 5 O a. $-1833.22 O b. $-1465.25 O. S-1546.80 1588 21

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
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When comparing the two machines shown below using Capital Recovery method if MARR is 8%? What is the capital recovery for machine B?
Machine A
Machine B
1st Cost
$12,000
8000
Operating cost/Yr
3500
2500
Salvage Value
3500
1000
Life
10
5
O a. $-1833.22
O b. $-1465.25
Oc. S-1546.80
O d. $-1588.21
Transcribed Image Text:When comparing the two machines shown below using Capital Recovery method if MARR is 8%? What is the capital recovery for machine B? Machine A Machine B 1st Cost $12,000 8000 Operating cost/Yr 3500 2500 Salvage Value 3500 1000 Life 10 5 O a. $-1833.22 O b. $-1465.25 Oc. S-1546.80 O d. $-1588.21
Expert Solution
Step 1 Formula

capital cost recovery can be calculated by using this equation 

Capital recovery cost =First costpresent value annuity factor -salvage value*present value annual factor

 

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