A mine costs $21M, and will last for 20 years. Its plant has a salvage value of $1M, at the end of the time. The mine will yield an equal dividend, if it is sufficient to pay interest annually at the rate 6% on the original investment and to accumulate a replacement fund, invested at 4%.
Solution

D = (FC)r + (RC - SV)i
———————
(1+i) -1

r= 6% = 0.06
i= 4% = 0.04

FC= 21M
SV= 1M