Neither of the following machines has any net salvage value . At what useful life are the

Question:

Neither of the following machines has any net salvage value.

B Original cost $55,000 $75,000 Annual expenses Operation 9,500 7,200 3,000 Maintenance 5,000 2,250 Taxes and insurance

At what useful life are the machines equivalent if

(a) 10% interest is used in the computations?

(b) 0% interest is used in the computations?

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...