Determine the capitalized cost for each design

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Reference no: EM132033853

Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,275,000, has annual operating and maintenance costs of $1,000,000, and requires overhauls every 5 years at a cost of $1,725,000.

Design B is more sophisticated, including computer controls; it has an initial cost of $5,975,000, has annual operating and maintenance costs of $550,000, and requires overhauls every 10 years at a cost of $3,450,000.

Using a 10.0 %/year interest rate, determine the capitalized cost for each design.

Design A: $

Design B: $

Reference no: EM132033853

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