Newport Corporation purchased equipment for making pneumatic vibration isolators at a cost of $90,000 two years ago. It has a market value that can be described by the relation $90,000- 8000k, where k is the years from time of purchase. Experience with this type of equipment has shown that the operating cost for the first 4 years is $6,000 per year, after which it increases by $6300 per year. The asset's salvage value was originally estimated to be $7000 after a predicted 10-year useful life. Determine the market value today if a replacement study is done now.
Newport Corporation purchased equipment for making pneumatic vibration isolators at a cost of $90,000 two years ago. It has a market value that can be described by the relation $90,000- 8000k, where k is the years from time of purchase. Experience with this type of equipment has shown that the operating cost for the first 4 years is $6,000 per year, after which it increases by $6300 per year. The asset's salvage value was originally estimated to be $7000 after a predicted 10-year useful life. Determine the market value today if a replacement study is done now.
Chapter1: Making Economics Decisions
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![Newport Corporation purchased equipment for making pneumatic vibration isolators at a cost of $90,000
two years ago. It has a market value that can be described by the relation $90,000 - 8000k, where k is the
years from time of purchase. Experience with this type of equipment has shown that the operating cost for
the first 4 years is $65,000 per year, after which it increases by $6300 per year. The asset's salvage value
was originally estimated to be $7000 after a predicted 10-year useful life. Determine the market value today
if a replacement study is done now.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe9cffbc5-75b7-473b-86ac-46a3f7f0cd6f%2Fc47faccb-5c94-4efe-83b7-cbdf7125f3a7%2Fgas8icd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Newport Corporation purchased equipment for making pneumatic vibration isolators at a cost of $90,000
two years ago. It has a market value that can be described by the relation $90,000 - 8000k, where k is the
years from time of purchase. Experience with this type of equipment has shown that the operating cost for
the first 4 years is $65,000 per year, after which it increases by $6300 per year. The asset's salvage value
was originally estimated to be $7000 after a predicted 10-year useful life. Determine the market value today
if a replacement study is done now.
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