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(8 points) Suppose that the cost of capital is 4% per annum. A machine costs $50,000, has a lifetime of 15 years, and a salvage
(8 points) Suppose that the cost of capital is 4% per annum. A machine costs $50,000, has a lifetime of 15 years, and a salvage value of $7,000. 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) $550 every year; Answer = $ b) $0 for the first 9 years, and then forms an arithmetic progression: $100,...,$600; Answer = $ c) $550 in the first 9 years, and then forms an arithmetic progression: $650,...,$1150. Answer = $ (8 points) Suppose that the cost of capital is 4% per annum. A machine costs $50,000, has a lifetime of 15 years, and a salvage value of $7,000. 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) $550 every year; Answer = $ b) $0 for the first 9 years, and then forms an arithmetic progression: $100,...,$600; Answer = $ c) $550 in the first 9 years, and then forms an arithmetic progression: $650,...,$1150. Answer = $
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