A radiology clinic is considering buying a new

$700,000 X-ray machine that will have no salvage value after installation, since the cost of removal will be approximately equal to its sales value. Maintenance is estimated at $24,000 per year as long as the machine is owned. After 10 years, the X-ray source will be depleted and the machine must be scrapped.

Which of the following represents the most economic life of this X-ray machine?

a. One year, since it will have no salvage after installation

b. Five years, since the maintenance costs are constant

c. Ten years, because maintenance costs don’t increase

d. Cannot be determined fromthe information given