ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Problem 06.004 Annual Worth and Capital Recovery Calculations
A delivery car had a first cost of $40,000, an annual operating cost of $20,000, and an estimated $3000 salvage value after its 6-year
life. Due to an economic slowdown, the car will be retained for only 2 years and must be sold now as a used vehicle. At an interest rate
of 11% per year, what must the market value of the used vehicle be in order for its AW value to be the same as the AW if it had been
kept for its full life cycle?
The market value of the used vehicle is determined to be $
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Transcribed Image Text:Problem 06.004 Annual Worth and Capital Recovery Calculations A delivery car had a first cost of $40,000, an annual operating cost of $20,000, and an estimated $3000 salvage value after its 6-year life. Due to an economic slowdown, the car will be retained for only 2 years and must be sold now as a used vehicle. At an interest rate of 11% per year, what must the market value of the used vehicle be in order for its AW value to be the same as the AW if it had been kept for its full life cycle? The market value of the used vehicle is determined to be $
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