Determine the capitalized cost for each design

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Reference no: EM131101227

Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,650,000, has annual operating and maintenance costs of $750,000, and requires overhauls every 5 years at a cost of $1,375,000. Design B is more sophisticated, including computer controls; it has an initial cost of $5,650,000, has annual operating and maintenance costs of $450,000, and requires overhauls every 10 years at a cost of $3,250,000.

Using a 6.5 %/year interest rate, determine the capitalized cost for each design.

Design A: $

Design B: $

Reference no: EM131101227

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