Agranary purchases a conveyor used in the manufacture of grain for transporting fillin or emptying. It is purchased and installed for $80,000 with a market value for salvage purposes that decreases at a rate of 20% per year with a minimum of value $1.750. Operation and maintenance is expected to cost $15.000 in the first year, increasing $1.060 per year thereafter. The granary uses a MARR of 15%. What is the optimum replacement interval for the conveyor? years.

Agranary purchases a conveyor used in the manufacture of grain for transporting fillin or emptying. It is purchased and installed for $80,000 with a market value for salvage purposes that decreases at a rate of 20% per year with a minimum of value $1.750. Operation and maintenance is expected to cost $15.000 in the first year, increasing $1.060 per year thereafter. The granary uses a MARR of 15%. What is the optimum replacement interval for the conveyor? years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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