2. A special-purpose machine is being installed at a first cost of $20,000. The following table shows the expected annual operating costs, maintenance costs and salvage values for each year of service. If interest is 10% annually, what is the economic service life for this machine? Year of Service Operation Cost for Maintenance Cost Salvage Value at Year for Year End of Year $2,000 $3,000 $4,000 $5,000 $6,000 $200 $300 $400 $500 $600 1 $10,000 $9,000 $8,000 $7,000 $6,000 2 3 4 $700 $7,000 Ś8 000 $5,000 S4 000 Ś800 7.

2. A special-purpose machine is being installed at a first cost of $20,000. The following table shows the expected annual operating costs, maintenance costs and salvage values for each year of service. If interest is 10% annually, what is the economic service life for this machine? Year of Service Operation Cost for Maintenance Cost Salvage Value at Year for Year End of Year $2,000 $3,000 $4,000 $5,000 $6,000 $200 $300 $400 $500 $600 1 $10,000 $9,000 $8,000 $7,000 $6,000 2 3 4 $700 $7,000 Ś8 000 $5,000 S4 000 Ś800 7.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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