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The Capitalized Cost CC Of an Asset Is Given By C=C0+0nC(t)ertdtC = C _ { 0 } + \int _ { 0 } ^ { n } C ( t ) e ^ { - r t } d t

Question 46

Multiple Choice

The capitalized cost CC of an asset is given by C=C0+0nC(t) ertdtC = C _ { 0 } + \int _ { 0 } ^ { n } C ( t ) e ^ { - r t } d t where C0C _ { 0 } is the original investment, tt is the time in years, rr is the annual interest rate compounded continuously, and C(t) C ( t ) is the annual cost of maintenance (in dollars) . Find the capitalized cost of an asset (a) for 5 years, (b) for 10 years, and (c) forever. C0=$300,000,C(t) =15,000,r=6%C _ { 0 } = \$ 300,000 , C ( t ) = 15,000 , r = 6 \%


A) a. For n=5,Cn = 5 , C \approx $253,901.30b. For n=10,Cn = 10 , C \approx $807,922.43c. For n=,Cn = \infty , C \approx $4,466,666.67
B) a. For n=5,Cn = 5 , C \approx $453,901.30b. For n=10,Cn = 10 , C \approx $807,922.43c. For n=,Cn = \infty , C \approx $1,466,666.67
C) a. For n=5,Cn = 5 , C \approx $453,901.30b. For n=10,Cn = 10 , C \approx $2807,922.43c. For n=,Cn = \infty , C \approx $4,466,666.67
D) a. For n=5,Cn = 5 , C \approx $453,901.30b. For n=10,Cn = 10 , C \approx $807,922.43c. For n=,Cn = \infty , C \approx $4,466,666.67
E) a. For n=5,Cn = 5 , C \approx $453,901.30b. For n=10,Cn = 10 , C \approx $807,922.43c. For n=,Cn = \infty , C \approx $466,666.67

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