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The Emerson Electronics Company just purchased a soldering machine to be used in its assembly cell for flexible disk drives. The soldering machine cost $350,000. Because of the specialized function it performs, its useful life is estimated to be five years. It is also estimated that at that time its salvage value will be $60,000. What is the capital recovery cost for this investment if the firm's interest rate is 15%?

Respuesta :

Chrisnando

Answer:

$95,512

Explanation:

Given P = $350,000

Salvage value (S) = $60,000

N = 5 years

t = 15%

To find Capital Recovery cost at 15%:

(CR 15%) = ($350,000 - $60,000)(A/P * 0.15 * 5) + $60000(0.15) = $95,512.00

Therefore, the capital recovery cost is $95,512

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