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A pump installation costing $3,000 with a service life of 3 years and having no salvage value requires $200 a year for maintenance and operation.

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A pump installation costing $3,000 with a service life of 3 years and having no salvage value requires $200 a year for maintenance and operation. Money is worth 8 per cent compounded annually. (i) What is the present worth of the (future) service rendered by this pump installation? (11) What is the capitalized cost for this service assuming perpetual operation

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