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14.7 The University Resume Service has just invested $8,000 in a new desktop pub- lishing system. From past experience, the owner of the company estimates its after-tax cash returns as An = $8,000 - $4,000(1 + 0.15) "-1, Sn = $6,000(1 - 0.3)", where A, stands for the net after-tax cash flows from operation of the system dur- ing period n and S stands for the after-tax salvage value at the end of period n. (a) If the company's MARR is 12%, compute the economic service life of the system.

14.7 The University Resume Service has just invested $8,000 in a new desktop pub- lishing system. From past experience, the owner of the company estimates its after-tax cash returns as An = $8,000 - $4,000(1 + 0.15) "-1, Sn = $6,000(1 - 0.3)", where A, stands for the net after-tax cash flows from operation of the system dur- ing period n and S stands for the after-tax salvage value at the end of period n. (a) If the company's MARR is 12%, compute the economic service life of the system.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 2E
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14.7 The University Resume Service has just invested $8,000 in a new desktop pub- lishing system. From past experience, the owner of the company estimates its after-tax cash returns as An = $8,000 - $4,000(1 + 0.15) "-1, Sn = $6,000(1 - 0.3)", where A, stands for the net after-tax cash flows from operation of the system dur- ing period n and S stands for the after-tax salvage value at the end of period n. (a) If the company's MARR is 12%, compute the economic service life of the system.
Transcribed Image Text:14.7 The University Resume Service has just invested $8,000 in a new desktop pub- lishing system. From past experience, the owner of the company estimates its after-tax cash returns as An = $8,000 - $4,000(1 + 0.15) "-1, Sn = $6,000(1 - 0.3)", where A, stands for the net after-tax cash flows from operation of the system dur- ing period n and S stands for the after-tax salvage value at the end of period n. (a) If the company's MARR is 12%, compute the economic service life of the system.
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