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Capital Cost when Salvage Value is 0 Formula

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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. Check FAQs

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

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

Capital Cost when Salvage Value is 0 Example

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Here is how the Capital Cost when Salvage Value is 0 equation looks like with Values.

Here is how the Capital Cost when Salvage Value is 0 equation looks like with Units.

Here is how the Capital Cost when Salvage Value is 0 equation looks like.

1999.9544 = \frac{2 \cdot 5 \cdot 1000}{1 + 5}

1999.9544 = \frac{2 \cdot 5Year \cdot 1000}{1 + 5Year}

1999.9544 = \frac{2 \cdot 5 \cdot 1000}{1 + 5}

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Capital Cost when Salvage Value is 0 Solution

Follow our step by step solution on how to calculate Capital Cost when Salvage Value is 0?

FIRST Step Consider the formula

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

Next Step Substitute values of Variables

∴

P Capital = \frac{2 \cdot 5Year \cdot 1000}{1 + 5Year}

Next Step Convert Units

∴

P Capital = \frac{2 \cdot 43829.1h \cdot 1000}{1 + 43829.1h}

Next Step Prepare to Evaluate

∴

P Capital = \frac{2 \cdot 43829.1 \cdot 1000}{1 + 43829.1}

Next Step Evaluate

∴

P Capital = 1999.95436925766

LAST Step Rounding Answer

∴

P Capital = 1999.9544

Capital Cost when Salvage Value is 0 Formula Elements

Variables

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

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

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

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 Average Investment when Salvage value is 0

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

How to Evaluate Capital Cost when Salvage Value is 0?

Capital Cost when Salvage Value is 0 evaluator uses Capital Cost = (2*Useful Life*Average Investment)/(1+Useful Life) to evaluate the Capital Cost, The Capital Cost when Salvage Value is 0 formula is defined as a fixed, one-time expense incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services. In other words, it is the total cost needed to bring a project to a commercially operable status. Capital Cost is denoted by P_Capital symbol.

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

FAQs on Capital Cost when Salvage Value is 0

What is the formula to find Capital Cost when Salvage Value is 0?

The formula of Capital Cost when Salvage Value is 0 is expressed as Capital Cost = (2*Useful Life*Average Investment)/(1+Useful Life). Here is an example- 1999.954 = (2*157784760*1000)/(1+157784760).

How to calculate Capital Cost when Salvage Value is 0?

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

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Capital Cost when Salvage Value is 0 Formula

Capital Cost when Salvage Value is 0 Example

Capital Cost when Salvage Value is 0 Solution

Capital Cost when Salvage Value is 0 Formula Elements

Other formulas in Management of Construction Equipment category

How to Evaluate Capital Cost when Salvage Value is 0?

FAQs on Capital Cost when Salvage Value is 0

Variable Name