Chapter 6.4, Problem 41E

(a)

To determine

To calculate: The capitalized cost of asset for $5\text{ years}$. If the capitalized cost is given by:

$C=C_0+{\displaystyle \underset{0}{\overset{n}{\int }}c\left(t\right)e^{-rt}dt}$

Here, $C_0$ is the original investment, $c\left(t\right)$ is the capitalized annual cost of maintenance, $r$ is the rate of interest compounded annually and $t$ is the time.

(b)

To determine

To calculate: The capitalized cost of asset for $10\text{ years}$. If the capitalized cost is given by:

$C=C_0+{\displaystyle \underset{0}{\overset{n}{\int }}c\left(t\right)e^{-rt}dt}$

Here, $C_0$ is the original investment, $c\left(t\right)$ is the capitalized annual cost of maintenance, $r$ is the rate of interest compounded annually and $t$ is the time.

(c)

To determine

To calculate: The capitalized cost of asset for forever. If the capitalized cost is given by:

$C=C_0+{\displaystyle \underset{0}{\overset{n}{\int }}c\left(t\right)e^{-rt}dt}$

Here, $C_0$ is the original investment, $c\left(t\right)$ is the capitalized annual cost of maintenance, $r$ is the rate of interest compounded annually and $t$ is the time.