Question

Capital recovery (CR) is the equivalent annual cost of owning the asset plus the return on the initial investment. In other words, it is the equivalent annual amount that a machine, process, or system must earn (revenue) each year to just recover the initial investment plus the stated rate of return over its expected life.

a. True
b. False

Answer 1

Answer:

a. True

Explanation:

It includes the equivalent amount initially invested plus interest rate that one can earn the funds by investing elsewhere.

Answer 2

Answer:

True

Explanation:

Capital recovery (CR) can also be defined as the equivalent amount that an asset, system or process must earn on a yearly basis to recover mainly the cost of acquiring it, and a state interest in the course of its expected useful life. When calculating the Capital Recovery of an asset, we must consider its salvage value.