Business, 10.03.2020 02:05, athenasartin1

Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,500,000, has annual operating and maintenance costs of $800,000, and requires overhauls every 5 years at a cost of $1,250,000. Design B is more sophisticated, including computer controls; it has an initial cost of $5,750,000, has annual operating and maintenance costs of $600,000, and requires overhauls every 10 years at a cost of $3,000,000. Using a 5 percent/year interest rate, determine the capitalized cost for each design and recommend which should be chosen.

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Two incinerators are being considered by a waste management company. Design A has an initial cost of...