The cost of maintaining a permanent monument is expected to be $70,000 now and $70,000 every 10 years forever. At an interest rate of 10% per year, the capitalized cost is nearest:
(a) $?11,393
(b) $?58,930
(c) $?84,360
(d) $?113,930
CC = -70,000 – 70,000(A/F,10%,10)/0.10
= -70,000[1 + (0.06275)/0.10]
= $-113,925
Answer is (d) $?113,930
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