Question
An asset has the estimated salvage values for various lives, shown in the table below. For each possible life from 1 to 6 by 1,
An asset has the estimated salvage values for various lives, shown in the table below. For each possible life from 1 to 6 by 1, determine the capital recovery cost for MARR of 8%/year.
| EOY | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
| NCF | -$115,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 |
| Estimated SV | $115,000 | $95,000 | $75,000 | $65,000 | $55,000 | $50,000 | $47,000 |
Capital recovery cost with 1-year life:
Capital recovery cost with 2 years life:
Capital recovery cost with 3 years life:
Capital recovery cost with 4 years life:
Capital recovery cost with 5 years life:
Capital recovery cost with 6 years life:
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Mathematical Finance Core Theory Problems And Statistical Algorithms
Authors: Nikolai Dokuchaev
1st Edition
0415414482, 978-0415414487
