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Answer :
Based on the information, the capital-recovery cost of the machine is a d. 33,234 SR.
How to calculate the capital recovery cost
To calculate the capital-recovery cost of the machine, we can use the formula for annual equivalent cost (AEC) or capital-recovery cost:
AEC = (P - S) * (i / (1 - (1 + i)⁻ⁿ))
Substituting these values into the formula:
AEC = (300,000 - 50,000) * (0.1 / (1 - (1 + 0.1)⁻¹⁵)
= 250,000 * (0.1 / (1 - 0.263)
= 250,000 * (0.1 / 0.737)
= 250,000 * 0.1356
≈ 33,900 SR
Rounding to the closest answer provided, the capital-recovery cost of the machine is approximately 33,900 SR. Therefore, the closest answer is d. 33,234 SR.
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