A new bottle-capping machine costs 46,000, including 5,000 for installation. The machine is expected to have a useful life of eight years with no salvage value at that time (assume straight-line depreciation). Operating and maintenance costs are expected to be 4,500 for the first year, increasing by 2,000 each year thereafter. Interest is 9%.

Construct a spreadsheet that has the following headings: Year, Salvage Value, Maintenance Costs, EAC (Capital Costs), EAC (Operating Costs), and EAC (Total Costs). Compute the EAC (Total Costs) if the bottle capper is kept for n years, n = 1,...,8.

What is the economic life of the bottle capper (in years)? ____________ [3/25]

Complete the row of the table indicating the economic life for this project.

NOTE: Use 5 significant figures in your calculations, and round your answers for the table below to the nearest dollar.

			EAC	EAC	EAC
Year	Salvage	Maintenance	Capital	Maintenance	Total
____________	____________	____________	____________	____________	____________
[3/25]	[3/25]	[4/25]	[5/25]	[5/25]	[2/25]

Answer rating: 100% (QA)

Firstly the depreciation each year will be 410008 5125 Hence we reduce the salvage va... View the full answer