MARR = 9.00% This machine has a 9 year economic service life after which it will have a $13,098 salvage value. The operating costs for this machine are expected to be $6,433 for the first year, increasing by $640/year for each year thereafter (for example, $6,433 for year 1, $7,073 for year 2, $7,713 for year 3, etc). At what market value of the existing machine would make the proposed machine equally economically attractive
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
need help.
MARR = 9.00%
This machine has a 9 year economic service life after which it will have a $13,098 salvage value. The operating
costs for this machine are expected to be $6,433 for the first year, increasing by $640/year for each year
thereafter (for example, $6,433 for year 1, $7,073 for year 2, $7,713 for year 3, etc).
At what market value of
the existing machine would make the proposed machine equally economically attractive?
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