This problem is based on the following cash flows for alternatives X and Y at an interest rate of 10% per year.
 FIGURE 1.png)
The capitalized cost of machine Y is closest to:
(a) $17,726
(b) $86,590
(c) $177,260
(d) $207,720
First find AW over n = 6 years and then divide by i
AWY = -220,000(A/P,10%,6) + 65,000 + 25,000(A/F,10%,6)
= -220,000(0.22961) + 65,000 + 25,000(0.12961)
= $17,726
CCY = 17,726/0.10
= $177,260
Answer is (c) $177,260
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