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Find the Capitalized Cost C of an Asset Forever C=C0+0nc(t)ertdtC = C _ { 0 } + \int _ { 0 } ^ { n } c ( t ) e ^ { - r t } d t

Question 47

Multiple Choice

Find the capitalized cost C of an asset forever. The capitalized cost is given by C=C0+0nc(t) ertdtC = C _ { 0 } + \int _ { 0 } ^ { n } c ( t ) e ^ { - r t } d t where C0=$500,000C _ { 0 } = \$ 500,000 is the original investment, t is the time in years, r = 12% is the annual interest rate compounded continuously, n is the total time in years over which the asset is capitalized, and c(t) =25,000(1+0.08t) c ( t ) = 25,000 ( 1 + 0.08 t ) is the annual cost of maintenance (measured in dollars) . Round your answer to two decimal places.


A) $1,125,000.00
B) $875,000.00
C) $708,333.33
D) $899,218.75
E) $847,222.22

Correct Answer:

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