A special purpose machine is to be purchased at a cost of $30,000 The following table shows the expected annual operating and maintenance cost and the salvage value for each year of service If the interest rate is 12 , what is the economic service life for this machine Year of Service O M Cost Mark...

At i 12 the economic service life is 1 year n 012 ...

A special-purpose machine is to be purchased at a cost of $30,000. The following table shows the

Question:

A special-purpose machine is to be purchased at a cost of $30,000. The following table shows the expected annual operating and maintenance cost and the for each year of service: Year of Service O&M Cost Market Value $5,000 $25,800 $16,000 $6,500 $10,000 $10,000 $12,500 4 $5,000 $0 $14,800

Year of Service O&M Cost Market Value $5,000 $25,800 $16,000 $6,500 $10,000 $10,000 $12,500 4 $5,000 $0 $14,800

If the interest rate is 12%, what is the economic service life for this machine?

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...

Fantastic news! We've Found the answer you've been seeking!