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Two incinerators are being considered by a waste management company. Design A has an initial cost of $ 2,575,000, has annual operating and maintenance costs
Two incinerators are being considered by a waste management company. Design A has an initial cost of $ 2,575,000, has annual operating and maintenance costs of $ 650,000, and requires overhauls every 5 years at a cost of $ 1,675,000. Design B is more sophisticated, including computer controls; it has an initial cost of $5,450,000, has annual operating and maintenance costs of $ 400,000, and requires overhauls every 10 years at a cost of $3,200,000. Part a Using a 8.0 %/year interest rate, determine the capitalized cost for each design. Design A: $ Design B: $
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