Useful life = 5 years MARR = 10% The asset market values in each year are...

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Useful life = 5 years MARR = 10% The asset market values in each year are estimated to be: A new piece of production machinery has the following costs: • Investment cost = $35,000 • Annual operating and maintenance cost = $3000 in Year 1 and then increasing by $1500 per year • Annual cost for risk of breakdown = $7000 per year • Year 1 2 $20,000 $17,000 $13,000 $8,000 $2,000 Calculate the marginal cost of keeping this asset over its useful life. 3 4 5 Market Value Useful life = 5 years MARR = 10% The asset market values in each year are estimated to be: A new piece of production machinery has the following costs: • Investment cost = $35,000 • Annual operating and maintenance cost = $3000 in Year 1 and then increasing by $1500 per year • Annual cost for risk of breakdown = $7000 per year • Year 1 2 $20,000 $17,000 $13,000 $8,000 $2,000 Calculate the marginal cost of keeping this asset over its useful life. 3 4 5 Market Value

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