To implement the project a new equipment is purchased at


Consider a facility that has a 30-year life, a replacement cost of $1 million, and an interest rate of 5%. 

a. Calculate the annualization factor. Show your work/ calculations using the formula.

b. Based on the annualization factor, calculate the annual cost of the facility.

c. To implement the project, a new equipment is purchased at $15,000 which has a useful life of 10 years. Using the annualization factor at 4% interest rate, what is the equipment's annual depreciation cost?

Solution Preview :

Prepared by a verified Expert
Macroeconomics: To implement the project a new equipment is purchased at
Reference No:- TGS01471746

Now Priced at $15 (50% Discount)

Recommended (94%)

Rated (4.6/5)