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A machine costs Rs. 20000 and its useful life is 8 years. The money is borrowed at 8% interest per annum. The capital recovery factor at 8% interest per annum for 8 years is 0.174. The annual equipment cost of the machine will be

Answer & Solution
Correct Answer: Option B
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5 Comments
Gitartha Borah
Gitartha Borah 6 years ago
Sinking fund factor is.174 for 8yrs at 8% per annum
Future value = 20000
So sinking fund to be set aside anually or the annual equipment cost = 20000×.174= 3480
Pratiksha Goswami
Pratiksha Goswami 6 years ago
20000*0.174= 3480
Ans:B
DIVYA NAYAK
DIVYA NAYAK 6 years ago
A(annual cost)=P(present worth)×capital recovery factor
A=20000×0.174
=3480 cost.
Israr Hussain
Israr Hussain 7 years ago
HOW?
Dhruv Patel
Dhruv Patel 7 years ago
Kaise ?