Answer: Capitalized Cost In Exercises 81 and 82, find the capitalized cost of an asset
Chapter 8, Problem 82(choose chapter or problem)
Capitalized Cost In Exercises 81 and 82,find the capitalized cost of an asset (a) for n = 5 years,(b) for n = 10 years,and (c) forever. The capitalized cost is given by
\(C=C_{0}+\int_{0}^{n} c(t) e^{-r t} d t\)
where \(C_0\)is the original investment,is the time in years,is the annual interest rate compounded continuously,and c(t) is the annual cost of maintenance.
\(\begin{array}{l} C_{0}=\$ 650,000 \\ c(t)=\$ 25,000(1+0.08 t) \\ r=0.06 \end{array} \)
Text Transcription:
C=C_0 + Int^n_0 c(t)e^-rt dt
C_0=$650,000
c(t)=$25,000(1+0.08t)
r=0.06
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