Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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8 years ago a company installed a robot that today has a market value of $ 60,000 and each year it drops $ 2000. For example, at the end of the first year the market value will be $ 58,000 and so it continues to decline. Maintenance costs for the next 4 years are estimated at $ 3000 this year and increasing 10% each year. Determine the marginal cost of extending the service for one year, for the next 4 years if the MARR is 12%. Fill in the blanks with the results.
Calculate:
a) The loss of market value in year 1 is $
b) Loss in interest in year 1 $
c) The Marginal Cost in year 1 is
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