An automaton asset with a high first cost of $10 million has required capital recovery (CR) of $1,985,000 per year. The correct interpretation of this CR value is that:
(a) the owner must pay an additional $1,985,000 each year to retain the asset.
(b) each year of its expected life, a net revenue of $1,985,000 must be realized to recover the
$10 million first cost and the required rate of return on this investment.
(c) each year of its expected life, a net revenue of $1,985,000 must be realized to recover the
$10 million first cost.
(d) the services provided by the asset will stop if less than $1,985,000 in net revenue is
reported in any year.
(b) each year of its expected life, a net revenue of $1,985,000 must be realized to recover the
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