From the data shown, determine the ESL of the asset. (Note: Values in the table are AW values, not individual year-end values.)| Years Retained | AW of First Cost, $ | AW of Operating Cost, $ | AW of Salvage Value, $ ||----------------|---------------------|-------------------------|------------------------|| 1 | -142,000 | -42,000 | 99,000 || 2 | -168,000 | -32,000 | 38,095 || 3 | -140,000 | -47,000 | 18,127 || 4 | -154,000 | -43,000 | 6,464 || 5 | -140,000 | -51,000 | 3,276 |The ESL of the asset is [ ] year(s).**Explanation:**The table provides data for an asset, presenting Annual Worth (AW) values over different years retained. The categories are:1. **AW of First Cost, $**: The initial cost spread across the asset's useful life.2. **AW of Operating Cost, $**: The operational expenses annually accounted for.3. **AW of Salvage Value, $**: The residual value obtained at the end of each year.The goal is to determine the optimal Economic Service Life (ESL) of the asset, which is the period that minimizes total costs or maximizes net benefits. This involves analyzing how costs and salvage values change over different years retained.

Use the below formula to find the net AW: Net effective AW for every year=-AW of First Cost-AW of…

From the data shown, determine the ESL of the asset. (Note: Values in the table are AW values, not individual year-end values.) Years Retained AW of First Cost, $ AW of Operating Cost, $ AW of Salvage Value, $ 1 -142,000 -42,000 99,000 2 -168,000 -32,000 38,095 3 -140,000 -47,000 18,127 4 -154,000 -43,000 6464 -140,000 -51,000 3276 The ESL of the asset is ]year(s).

From the data shown, determine the ESL of the asset. (Note: Values in the table are AW values, not individual year-end values.) Years Retained AW of First Cost, $ AW of Operating Cost, $ AW of Salvage Value, $ 1 -142,000 -42,000 99,000 2 -168,000 -32,000 38,095 3 -140,000 -47,000 18,127 4 -154,000 -43,000 6464 -140,000 -51,000 3276 The ESL of the asset is ]year(s).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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