Find the Capitalized Cost C of an Asset Forever $C = C _ { 0 } + \int _ { 0 } ^ { n } c ( t ) e ^ { - r t } d t$

question 21

Multiple Choice

Find the capitalized cost C of an asset forever. The capitalized cost is given by $C = C _ { 0 } + \int _ { 0 } ^ { n } c ( t ) e ^ { - r t } d t$ where $C _ { 0 } = \$ 500,000$ is the original investment, t is the time in years, r = 12% is the annual interest rate compounded continuously, n is the total time in years over which the asset is capitalized, and $c ( t ) = 25,000 ( 1 + 0.08 t )$ is the annual cost of maintenance (measured in dollars) . Round your answer to two decimal places.

• A)$1,125,000.00
• B)$875,000.00
• C)$708,333.33
• D)$899,218.75
• E)$847,222.22

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Definitions:

Board of Directors

A group of individuals elected to represent shareholders and make key decisions regarding the company's management and policy.

Dividend Yield

Dividend yield is a financial metric indicating the annual dividend payout of a company as a percentage of its share price.

Earnings per Share

A financial metric that calculates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.