Description of Analysis of Capital Costs Equation

Annualized capital costs equals 1 minus the quantity r divided by 1 -the quantity r raised to the power of l, the useful life of the investment in years. This quotient is multiplied by the capital cost in dollars divided by the quantity r raised to the power of the year of opening minus the midpoint of the construction year plus one. The quantity r equals one over one plus the discount rate, exressed as a decimal fraction.