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Plant Design & Economics
Cost Estimation
GATE 2018
Hard

A furnace costs Rs.24 Lakh, useful life 5 years, salvage Rs.8 Lakh, interest 8% compounded annually. The estimated capitalized cost (Lakh Rs) is

  • A30
  • B34.09
  • C34.9
  • 58.09

Explanation

CC=Co+(Co−Sv)/((1+i)^n−1)=24+(24−8)/((1.08)^5−1)=24+16/0.4693=24+34.09=58.09 Lakh.

Source: GATE CH 2018 (2018)

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