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Engineering Economy

Q1:

The capital Recovery Factor (equal payments) of Capital Recovery Annuity is :

A

B

C

D None of these.

ANS:A -

If I is an initial investment the uniform amount(A) the company needs to earn to repay the initial investment is a capital recovery annuity. if we bring I and A to the same year n. Then I(1+i)^n=A[(1+i)^n)-1]/i.

A/I = capital recovery factor which gives option A.



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