A Company Bought and Installed an Assembly Line for $5

Multiple Choice

A company bought and installed an assembly line for $5 million and $0.5 million respectively. The company plans to use this assembly line for 8 years and then sell it for $100 000. Calculate the equivalent annual capital costs of the assembly line if the capital recovery factor is 0.1874, and MARR is 10% for the capital investment.

A) $0.997 million
B) $1.012 million
C) $1.022 million
D) $1.027 million
E) $1.046 million