# Solution: Determine the capital recovery rate per year of a company

A company must relocate one of its factories in three years. Equipment for the loading dock is being considered for purchase. The original cost is P20,000, the salvage value of the equipment after three years is P8,0000.

#### Problem Statement: ME Board October 1995

A company must relocate one of its factories in three years. Equipment for the loading dock is being considered for purchase. The original cost is P20,000, the salvage value of the equipment after three years is P8,0000. The company’s rate of return on the money is 10%. Determine the capital recovery rate per year.

• A. P5,115
• B. P4,946
• C. P5,625
• D. P4,805

The capital recovery rate per year of a company is P5,625.

Solution:

### Latest Problem Solving in Engineering Economics (Annuity, Depreciation, Bonds, Breakeven, etc.)

More Questions in: Engineering Economics (Annuity, Depreciation, Bonds, Breakeven, etc.)

#### Search! Type it and Hit Enter

 We educate thousands of students a week in preparation for their licensure examinations. We provide professionals with materials for their lectures and practice exams. To help us go forward with the same spirit, contribution from your side will highly appreciated. Thank you in advance. Option 1 : \$5 USD Option 2 : \$10 USD Option 3 : \$15 USD Option 4 : \$20 USD Option 5 : \$25 USD Option 6 : \$50 USD Option 7 : \$100 USD Option 8 : Other Amount

Name

Email *

Message *