Plastic Copper Capital investment Useful (class) life Salvage value for depreciation purposes $1,000(- SVs) $5.000(-SV10) Annual expenses Market value at end of useful life $5,000 $10,000 5 years 10 years $300 $100 SO
Plastic Copper Capital investment Useful (class) life Salvage value for depreciation purposes $1,000(- SVs) $5.000(-SV10) Annual expenses Market value at end of useful life $5,000 $10,000 5 years 10 years $300 $100 SO
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
In a chlorine-fluxing installation in a large aluminum company, engineers are
considering the replacement of existing plastic pipe fittings with more expensive, but longer lived, copper fittings. The following table gives a comparison of the capital investments, lives, salvage values, and so on of the two mutually exclusive alternatives under consideration:

Transcribed Image Text:Plastic
Copper
Capital investment
Useful (class) life
Salvage value for depreciation purposes S1,000(3SV5) $5.000(-SV10)
Annual expenses
Market value at end of useful life
$5,000
$10,000
10 years
5 years
%3D
24300
SO
24100
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