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Substitute $75000 for salvage value(S) after six years service (n).
$300000(6+1)+$75000(6-1)
AAI =
26
$2100000+$375000
=
12
= $206250/yr
$206250/yr6.32% Comment [VNK4]: These dot lines are to be
Cost of money portion = avoided.
2800 hr/yr
Comment [VNK5]: Numbering for equation
= $4.66 /hr (1) should be at page right.
Comment [VNK6]: Description should be given
regarding the formula.
$225000
= $13.40/hr (2)
6 yr2800 hr/yr