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(8 points) Suppose that the cost of capital is 11% per annum. A machine costs $60,000, has a lifetime of 12 years, and a salvage
(8 points) Suppose that the cost of capital is 11% per annum. A machine costs $60,000, has a lifetime of 12 years, and a salvage value of $8,500. Find the machine's capitalized cost if the annual maintenance cost of a machine during its lifetime (paid at the end of each year) is: a) $450 every year; Answer = $ b) $0 for the first 6 years, and then forms an arithmetic progression: $100,...,$600; Answer = $ c) $450 in the first 6 years, and then forms an arithmetic progression: $550,...,$1050. Answer = $ Click for a hint "Cost of capital per annum" is a fancy phrase for the effective annual interest rate
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