What is capitalized equivalent cost of infinite payments

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1. Maintenance costs on a bridge are $5,000 every five years starting at the end of year 5. For analysis purposes, the bridge is assumed to have an infinite life. What is the Capitalized Equivalent (CE) cost of these infinite payments, assuming an annual interest rate of 8% compounded annually? Need work, not excel

2. You purchase a machine for $80,000 now, with a salvage value of $25,000 in 10 years. The machine will have O&M costs and cost of raw goods totaling $30,000 per year. The machine will produce 5,000 high-quality parts per year. If i = 9% annual rate compounded annually, what is the cost per high-quality part produced? Need work, not excel.

Reference no: EM131963551

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