The capitalized cost c of the assets of its lifetime where it is provided that the it is the total of the initial cost and the present value of all the maintenance expenses in future. Capitalized cost computed with the formula, c = c 0 + ∫ 0 L m ( t ) e − k t d t , where c 0 is the initial cost of the asset, L is the lifetime (in years), k is the interest rate (compounded continuously), and m ( t ) is the annual cost of maintenance. c 0 = $ 600 , 000 , k = 4 % , m ( t ) = $ 40 , 000 + $ 1000 e 0.01 t , L = 40
The capitalized cost c of the assets of its lifetime where it is provided that the it is the total of the initial cost and the present value of all the maintenance expenses in future. Capitalized cost computed with the formula, c = c 0 + ∫ 0 L m ( t ) e − k t d t , where c 0 is the initial cost of the asset, L is the lifetime (in years), k is the interest rate (compounded continuously), and m ( t ) is the annual cost of maintenance. c 0 = $ 600 , 000 , k = 4 % , m ( t ) = $ 40 , 000 + $ 1000 e 0.01 t , L = 40
Solution Summary: The author calculates the capitalized cost c of the assets of its lifetime where the initial cost and the present value of all the maintenance expenses in future.
To calculate: The capitalized cost c of the assets of its lifetime where it is provided that the it is the total of the initial cost and the present value of all the maintenance expenses in future.
Capitalized cost computed with the formula, c=c0+∫0Lm(t)e−ktdt, where c0 is the initial cost of the asset, L is the lifetime (in years), k is the interest rate (compounded continuously), and m(t) is the annual cost of maintenance.
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