Determine the economic useful life of a piece of equipment whose initial cost is $10,000 and its salvage value operating costs are shown below: use i=10% per year Year Costs of operation ($ per year) rescue value 1 1000 7000 2 1200 5000 3 1300 4500 4 2000 3000 5 3000 2000

Determine the economic useful life of a piece of equipment whose initial cost is $10,000 and its salvage value operating costs are shown below: use i=10% per year Year Costs of operation ($ per year) rescue value 1 1000 7000 2 1200 5000 3 1300 4500 4 2000 3000 5 3000 2000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Determine the economic useful life of a piece of equipment whose initial cost is $10,000 and its salvage value operating costs are shown below: use i=10% per year

Year	Costs of operation ($ per year)	rescue value
1	1000	7000
2	1200	5000
3	1300	4500
4	2000	3000
5	3000	2000

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