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Average Investment when Salvage value is 0 Formula

GoAverage Investment if Salvage Value is not 0 Formula

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Average Investment is the money which is spent on purchasing an equipment. The average is considered because the capital may not be same due to depreciation. Check FAQs

I a = (\frac{1 + n}{2 \cdot n}) \cdot P Capital

I_a - Average Investment?n - Useful Life?P_Capital - Capital Cost?

Average Investment when Salvage value is 0 Example

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Here is how the Average Investment when Salvage value is 0 equation looks like with Values.

Here is how the Average Investment when Salvage value is 0 equation looks like with Units.

Here is how the Average Investment when Salvage value is 0 equation looks like.

1199.4 = (\frac{1 + 5}{2 \cdot 5}) \cdot 1999

1199.4 = (\frac{1 + 5Year}{2 \cdot 5Year}) \cdot 1999

1199.4 = (\frac{1 + 5}{2 \cdot 5}) \cdot 1999

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Average Investment when Salvage value is 0 Solution

Follow our step by step solution on how to calculate Average Investment when Salvage value is 0?

FIRST Step Consider the formula

I a = (\frac{1 + n}{2 \cdot n}) \cdot P Capital

Next Step Substitute values of Variables

∴

I a = (\frac{1 + 5Year}{2 \cdot 5Year}) \cdot 1999

Next Step Prepare to Evaluate

∴

I a = (\frac{1 + 5}{2 \cdot 5}) \cdot 1999

LAST Step Evaluate

∴

I a = 1199.4

Average Investment when Salvage value is 0 Formula Elements

Variables

Average Investment

Average Investment is the money which is spent on purchasing an equipment. The average is considered because the capital may not be same due to depreciation.

Symbol: I_a

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Average Investment

Useful Life

Useful Life is termed as an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation.

Symbol: n

Measurement: TimeUnit: Year

Note: Value should be greater than 0.

Formulas to find Useful Life

Capital Cost

Capital Cost is fixed, one-time expenses incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services.

Symbol: P_Capital

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Capital Cost

Other Formulas to find Average Investment

Go Average Investment if Salvage Value is not 0

I a = \frac{S s \cdot (n - 1) + P Capital \cdot (n + 1)}{2 \cdot n}

Other formulas in Management of Construction Equipment category

Go Hourly Depreciation

D h = 0.9 \cdot \frac{C bv}{L s}

Go Life Span of Machine

L s = 0.9 \cdot \frac{C bv}{D h}

Go Book Value for New Machine

C bv = \frac{D h \cdot L s}{0.9}

Go Capital Cost when Salvage Value is 0

P Capital = \frac{2 \cdot n \cdot I a}{1 + n}

How to Evaluate Average Investment when Salvage value is 0?

Average Investment when Salvage value is 0 evaluator uses Average Investment = ((1+Useful Life)/(2*Useful Life))*Capital Cost to evaluate the Average Investment, The Average Investment when Salvage value is 0 formula is defined as the money which is invested to purchase equipment. Since the capital value does not remain the same due to depreciation, an average value of investment is always calculated. Average Investment is denoted by I_a symbol.

How to evaluate Average Investment when Salvage value is 0 using this online evaluator? To use this online evaluator for Average Investment when Salvage value is 0, enter Useful Life (n) & Capital Cost (P_Capital) and hit the calculate button.

FAQs on Average Investment when Salvage value is 0

What is the formula to find Average Investment when Salvage value is 0?

The formula of Average Investment when Salvage value is 0 is expressed as Average Investment = ((1+Useful Life)/(2*Useful Life))*Capital Cost. Here is an example- 1199.4 = ((1+157784760)/(2*157784760))*1999.

How to calculate Average Investment when Salvage value is 0?

With Useful Life (n) & Capital Cost (P_Capital) we can find Average Investment when Salvage value is 0 using the formula - Average Investment = ((1+Useful Life)/(2*Useful Life))*Capital Cost.

What are the other ways to Calculate Average Investment?

Here are the different ways to Calculate Average Investment-

Average Investment=(Salvage*(Useful Life-1)+Capital Cost*(Useful Life+1))/(2*Useful Life)

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Average Investment when Salvage value is 0 Formula

​GoAverage Investment if Salvage Value is not 0 Formula

Average Investment when Salvage value is 0 Example

Average Investment when Salvage value is 0 Solution

Average Investment when Salvage value is 0 Formula Elements

Other Formulas to find Average Investment

Other formulas in Management of Construction Equipment category

How to Evaluate Average Investment when Salvage value is 0?

FAQs on Average Investment when Salvage value is 0

Variable Name

GoAverage Investment if Salvage Value is not 0 Formula