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Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,975,000, has annual operating and maintenance costs of
Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,975,000, has annual operating and maintenance costs of $850,000, and requires overhauls every 5 years at a cost of $1,125,000. Design B is more sophisticated, including computer controls; it has an initial cost of $5,350,000, has annual operating and maintenance costs of $500,000, and requires overhauls every 10 years at a cost of $2,650,000. Part a Using a 7.0%/ year interest rate, determine the capitalized cost for each design. Design A: \$ Design B: \$
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