Capitalized Cost Calculator

✖Original Cost of Equipment refers to the total amount of money spent to acquire or purchase a specific piece of equipment when it was initially obtained for use in a business or operational setting.ⓘ Original Cost of Equipment [V]			+10% -10%
✖Replacement costs refer to the estimated expenses or expenditures required to replace an existing asset or item with a new one of similar functionality, condition, and capacity.ⓘ Replacement Cost [C_R]			+10% -10%
✖Discrete Compound Interest Rate rate refers to the interest that is calculated and compounded at specific, discrete intervals during a given period, rather than continuously.ⓘ Discrete Compound Interest Rate [i]			+10% -10%
✖The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.ⓘ Number of Interest Periods [n]			+10% -10%

✖Capitalized Cost, also known as capital cost, refers to the total cost incurred to acquire, construct, or produce a long-term asset that provides benefits over an extended period.ⓘ Capitalized Cost [K]

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Formula

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Capitalized Cost

Formula

`"K" = "V"+("C"_{"R"}/((1+"i")^("n")-1))`

Example

`"732926.8"="50000"+("70000"/((1+"0.05")^("2")-1))`

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Capitalized Cost Solution

STEP 0: Pre-Calculation Summary

Formula Used

Capitalized Cost = Original Cost of Equipment+(Replacement Cost/((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1))
K = V+(C_R/((1+i)^(n)-1))
This formula uses 5 Variables

Variables Used

Capitalized Cost - Capitalized Cost, also known as capital cost, refers to the total cost incurred to acquire, construct, or produce a long-term asset that provides benefits over an extended period.
Original Cost of Equipment - Original Cost of Equipment refers to the total amount of money spent to acquire or purchase a specific piece of equipment when it was initially obtained for use in a business or operational setting.
Replacement Cost - Replacement costs refer to the estimated expenses or expenditures required to replace an existing asset or item with a new one of similar functionality, condition, and capacity.
Discrete Compound Interest Rate - Discrete Compound Interest Rate rate refers to the interest that is calculated and compounded at specific, discrete intervals during a given period, rather than continuously.
Number of Interest Periods - The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.

STEP 1: Convert Input(s) to Base Unit

Original Cost of Equipment: 50000 --> No Conversion Required
Replacement Cost: 70000 --> No Conversion Required
Discrete Compound Interest Rate: 0.05 --> No Conversion Required
Number of Interest Periods: 2 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

K = V+(C_R/((1+i)^(n)-1)) --> 50000+(70000/((1+0.05)^(2)-1))

Evaluating ... ...

K = 732926.829268292

STEP 3: Convert Result to Output's Unit

732926.829268292 --> No Conversion Required

FINAL ANSWER

732926.829268292 ≈ 732926.8 <-- Capitalized Cost

(Calculation completed in 00.004 seconds)

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Home » Engineering » Chemical Engineering » Plant Design and Economics » Interest and Investment Costs » Capitalized Cost

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< 9 Interest and Investment Costs Calculators

Present Worth of Annuity

Go Present Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate*(1+Discrete Compound Interest Rate)^(Number of Interest Periods)))

Present Worth with Salvage Value of Equipment at 2nd Year Investment

Go Present Worth = Purchase Cost of Equipment-(Annuity)/(1+Interest Rate per Period)-(Annuity)/(1+Interest Rate per Period)^(2)+Salvage Value of Equipment

Future Worth of Perpetuity

Go Future Worth of a Perpetuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/((Discrete Compound Interest Rate)))

Future Worth of Annuity

Go Future Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate))

Capitalized Cost

Go Capitalized Cost = Original Cost of Equipment+(Replacement Cost/((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1))

Future Worth of Annuity given Present Annuity

Go Future Worth of an Annuity = Present Worth of an Annuity*((1+Discrete Compound Interest Rate)^(Number of Interest Periods))

Present Worth for Initial Replacement

Go Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1))

Replacement Cost

Go Replacement Cost = Original Cost of Equipment-Salvage Value of Equipment

Present Worth of Perpetuity

Go Present Worth of a Perpetuity = Annuity/Discrete Compound Interest Rate

Capitalized Cost Formula

Capitalized Cost = Original Cost of Equipment+(Replacement Cost/((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1))
K = V+(C_R/((1+i)^(n)-1))

What is Investment Costs?

Investment costs, also known as capital costs or capital expenditures, refer to the expenses incurred by individuals, businesses, or organizations to acquire, upgrade, or maintain physical assets or financial instruments with the expectation of generating future income, appreciation, or other benefits. These costs are typically associated with long-term investments aimed at enhancing productivity, generating revenue, or achieving specific strategic goals.

How to Calculate Capitalized Cost?

Capitalized Cost calculator uses Capitalized Cost = Original Cost of Equipment+(Replacement Cost/((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)) to calculate the Capitalized Cost, Capitalized Cost also known as capital cost, refers to the total cost incurred to acquire, construct, or produce a long-term asset that provides benefits over an extended period. Capitalized Cost is denoted by K symbol.

How to calculate Capitalized Cost using this online calculator? To use this online calculator for Capitalized Cost, enter Original Cost of Equipment (V), Replacement Cost (C_R), Discrete Compound Interest Rate (i) & Number of Interest Periods (n) and hit the calculate button. Here is how the Capitalized Cost calculation can be explained with given input values -> 494092 = 50000+(70000/((1+0.05)^(2)-1)).

FAQ

What is Capitalized Cost?

Capitalized Cost also known as capital cost, refers to the total cost incurred to acquire, construct, or produce a long-term asset that provides benefits over an extended period and is represented as K = V+(C_R/((1+i)^(n)-1)) or Capitalized Cost = Original Cost of Equipment+(Replacement Cost/((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)). Original Cost of Equipment refers to the total amount of money spent to acquire or purchase a specific piece of equipment when it was initially obtained for use in a business or operational setting, Replacement costs refer to the estimated expenses or expenditures required to replace an existing asset or item with a new one of similar functionality, condition, and capacity, Discrete Compound Interest Rate rate refers to the interest that is calculated and compounded at specific, discrete intervals during a given period, rather than continuously & The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.

How to calculate Capitalized Cost?

Capitalized Cost also known as capital cost, refers to the total cost incurred to acquire, construct, or produce a long-term asset that provides benefits over an extended period is calculated using Capitalized Cost = Original Cost of Equipment+(Replacement Cost/((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)). To calculate Capitalized Cost, you need Original Cost of Equipment (V), Replacement Cost (C_R), Discrete Compound Interest Rate (i) & Number of Interest Periods (n). With our tool, you need to enter the respective value for Original Cost of Equipment, Replacement Cost, Discrete Compound Interest Rate & Number of Interest Periods and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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