A theft-avoidance locking system has a first cost of $23,500, an AOC of $16,000, and no salvage value after its 3-year life. Assume that you were told the service provided by this asset would be needed for only 5 years. This means that the asset will have to be repurchased and kept for only 2 years.What would its market value, call it M, have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle at an interest rate of 10% per year? Determine the market value M using factors. The market value M is $ Required informationA theft-avoidance locking system has a first cost of $23,500, an AOC of $16,000, and no salvage value after its 3-year life.Assume that you were told the service provided by this asset would be needed for only 5 years. This means that the assetwill have to be repurchased and kept for only 2 years.What would its market value, call it M, have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycleat an interest rate of 10% per year? Determine the market value Musing factors.The market value Mis $|

Annual worth (AW)can be calculated by using the following formula.

Answered: A theft-avoidance locking system has a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A theft-avoidance locking system has a first cost of $23,500, an AOC of $16,000, and no salvage value after its 3-year life. Assume that you were told the service provided by this asset would be needed for only 5 years. This means that the asset will have to be repurchased and kept for only 2 years.

What would its market value, call it M, have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle at an interest rate of 10% per year? Determine the market value M using factors.

The market value M is $

Required information
A theft-avoidance locking system has a first cost of $23,500, an AOC of $16,000, and no salvage value after its 3-year life.
Assume that you were told the service provided by this asset would be needed for only 5 years. This means that the asset
will have to be repurchased and kept for only 2 years.
What would its market value, call it M, have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle
at an interest rate of 10% per year? Determine the market value Musing factors.
The market value Mis $|

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