{"id":8399,"date":"2024-04-15T02:59:59","date_gmt":"2024-04-15T02:59:59","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=8399"},"modified":"2024-04-15T02:59:59","modified_gmt":"2024-04-15T02:59:59","slug":"a-machine-costs-rs-20000-and-its-useful-life-is-8-years-the-money-is-borrowed-at-8-interest-per-annum-the-capital-recovery-factor-at-8-interest-per-annum-for-8-years-is-0-174-the-annual-equipment","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/a-machine-costs-rs-20000-and-its-useful-life-is-8-years-the-money-is-borrowed-at-8-interest-per-annum-the-capital-recovery-factor-at-8-interest-per-annum-for-8-years-is-0-174-the-annual-equipment\/","title":{"rendered":"A machine costs Rs. 20000 and its useful life is 8 years. The money is borrowed at 8% interest per annum. The capital recovery factor at 8% interest per annum for 8 years is 0.174. The annual equipment cost of the machine will be A. Rs. 1740 B. Rs. 3480 C. Rs. 5220 D. Rs. 6960"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;Rs. 1740&#8243; option2=&#8221;Rs. 3480&#8243; option3=&#8221;Rs. 5220&#8243; option4=&#8221;Rs. 6960&#8243; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is A. Rs. 1740.<\/p>\n<p>The annual equipment cost of the machine is the annual amount of money that must be paid to recover the cost of the machine, including interest. This can be calculated using the capital recovery factor (CRF), which is a factor that takes into account the interest rate and the number of years of the loan.<\/p>\n<p>In this case, the CRF is 0.174, the interest rate is 8%, and the number of years is 8. Therefore, the annual equipment cost of the machine is:<\/p>\n<p>Annual equipment cost = CRF * Cost of machine \/ (1 &#8211; (1 + CRF)^-n)<\/p>\n<p>= 0.174 * 20000 \/ (1 &#8211; (1 + 0.08)^-8)<\/p>\n<p>= 1740<\/p>\n<p>The other options are incorrect because they do not take into account the CRF.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;Rs. 1740&#8243; option2=&#8221;Rs. 3480&#8243; option3=&#8221;Rs. 5220&#8243; option4=&#8221;Rs. 6960&#8243; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[655],"tags":[],"class_list":["post-8399","post","type-post","status-publish","format-standard","hentry","category-construction-planning-and-management","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A machine costs Rs. 20000 and its useful life is 8 years. The money is borrowed at 8% interest per annum. The capital recovery factor at 8% interest per annum for 8 years is 0.174. The annual equipment cost of the machine will be A. Rs. 1740 B. Rs. 3480 C. Rs. 5220 D. Rs. 6960<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/a-machine-costs-rs-20000-and-its-useful-life-is-8-years-the-money-is-borrowed-at-8-interest-per-annum-the-capital-recovery-factor-at-8-interest-per-annum-for-8-years-is-0-174-the-annual-equipment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A machine costs Rs. 20000 and its useful life is 8 years. The money is borrowed at 8% interest per annum. The capital recovery factor at 8% interest per annum for 8 years is 0.174. The annual equipment cost of the machine will be A. Rs. 1740 B. Rs. 3480 C. Rs. 5220 D. Rs. 6960\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;Rs. 1740&#8243; option2=&#8221;Rs. 3480&#8243; option3=&#8221;Rs. 5220&#8243; option4=&#8221;Rs. 6960&#8243; correct=&#8221;option1&#8243;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/a-machine-costs-rs-20000-and-its-useful-life-is-8-years-the-money-is-borrowed-at-8-interest-per-annum-the-capital-recovery-factor-at-8-interest-per-annum-for-8-years-is-0-174-the-annual-equipment\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T02:59:59+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"A machine costs Rs. 20000 and its useful life is 8 years. The money is borrowed at 8% interest per annum. The capital recovery factor at 8% interest per annum for 8 years is 0.174. The annual equipment cost of the machine will be A. Rs. 1740 B. Rs. 3480 C. Rs. 5220 D. Rs. 6960","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/a-machine-costs-rs-20000-and-its-useful-life-is-8-years-the-money-is-borrowed-at-8-interest-per-annum-the-capital-recovery-factor-at-8-interest-per-annum-for-8-years-is-0-174-the-annual-equipment\/","og_locale":"en_US","og_type":"article","og_title":"A machine costs Rs. 20000 and its useful life is 8 years. The money is borrowed at 8% interest per annum. The capital recovery factor at 8% interest per annum for 8 years is 0.174. The annual equipment cost of the machine will be A. Rs. 1740 B. Rs. 3480 C. Rs. 5220 D. Rs. 6960","og_description":"[amp_mcq option1=&#8221;Rs. 1740&#8243; option2=&#8221;Rs. 3480&#8243; option3=&#8221;Rs. 5220&#8243; option4=&#8221;Rs. 6960&#8243; correct=&#8221;option1&#8243;]","og_url":"https:\/\/exam.pscnotes.com\/mcq\/a-machine-costs-rs-20000-and-its-useful-life-is-8-years-the-money-is-borrowed-at-8-interest-per-annum-the-capital-recovery-factor-at-8-interest-per-annum-for-8-years-is-0-174-the-annual-equipment\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-15T02:59:59+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/a-machine-costs-rs-20000-and-its-useful-life-is-8-years-the-money-is-borrowed-at-8-interest-per-annum-the-capital-recovery-factor-at-8-interest-per-annum-for-8-years-is-0-174-the-annual-equipment\/","url":"https:\/\/exam.pscnotes.com\/mcq\/a-machine-costs-rs-20000-and-its-useful-life-is-8-years-the-money-is-borrowed-at-8-interest-per-annum-the-capital-recovery-factor-at-8-interest-per-annum-for-8-years-is-0-174-the-annual-equipment\/","name":"A machine costs Rs. 20000 and its useful life is 8 years. 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