8. An asset with a first cost of $20,000 has an annual operating cost of $12,000 and a $4000 salvage value after its 4-year life. If the project will be needed for 6 years, what would the market (salvage) value of the 2-year-old asset have to be for the annual worth to be the same as it is for one life cycle of the asset? Use an interest rate of 10% per year.

Structural Analysis
6th Edition
ISBN:9781337630931
Author:KASSIMALI, Aslam.
Publisher:KASSIMALI, Aslam.
Chapter2: Loads On Structures
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8. An asset with a first cost of $20,000 has an annual operating cost of $12,000
and a $4000 salvage value after its 4-year life. If the project will be needed
for 6 years, what would the market (salvage) value of the 2-year-old asset
have to be for the annual worth to be the same as it is for one life cycle of
the asset? Use an interest rate of 10% per year.
Transcribed Image Text:8. An asset with a first cost of $20,000 has an annual operating cost of $12,000 and a $4000 salvage value after its 4-year life. If the project will be needed for 6 years, what would the market (salvage) value of the 2-year-old asset have to be for the annual worth to be the same as it is for one life cycle of the asset? Use an interest rate of 10% per year.
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