Question
1 (10 pts) A piece of equipment has a first cost of $15000, a maximum useful...
1 (10 pts) A piece of equipment has a first cost of $15000, a maximum useful life of 4 years, and a market (salvage) value described by the relation Sk = 12000 – 2100k, where k is the number of years since it was purchased. The AOC series is estimated using AOC = 6000 + 900k. The interest rate is 9% per year. When should the company replace this asset?
Homework Answers
Answer #1
Price = $ 15,000, Salvage Value = $ 12,000 - 2,100K, AOC = 6000 + 900K
Calcualting the AEC of year 1
Now calculating the AW of year 2
Calculating AW of year 3
Calculating for year 4
Economic Service Life = 3 years
Please contact if havong any quwey will be obliged to you for your genereous support. Your help mean a lot to me, please help. Thank you
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