A piece of equipment has a first cost of $170,000, a maximum useful life of 7 years, and a market (salvage) value described by the relation S = 120,000 -21,000k, where k is the number of years since it was purchased. The salvage value cannot go below zero. The AOC series is estimated using AOC = 60,000 + 11,000k. The interest rate is 8% per year. Determine the economic service life and the respective AW. The economic service life is year(s) and the AW value is $3

A piece of equipment has a first cost of $170,000, a maximum useful life of 7 years, and a market (salvage) value described by the relation S = 120,000 -21,000k, where k is the number of years since it was purchased. The salvage value cannot go below zero. The AOC series is estimated using AOC = 60,000 + 11,000k. The interest rate is 8% per year. Determine the economic service life and the respective AW. The economic service life is year(s) and the AW value is $3

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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