Hand written solutions are strictly prohibited !Required informationA theft-avoidance locking system has a first cost of $31,000, an AOC of $9,000, and no salvage value after its 3-yearlife. Assume that you were told the service provided by this asset would be needed for only 5 years. This means thatthe asset will have to be repurchased and kept for only 2 years.What would its market value, call it M, have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycleat an interest rate of 10% per year? Determine the market value M using factors.The market value M is $

In Engineering economics, Annual Worth (AW) is used to compare different cash flow series which…

What would its market value, call it M, have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle at an interest rate of 10% per year? Determine the market value M using factors. The market value M is $

What would its market value, call it M, have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle at an interest rate of 10% per year? Determine the market value M using factors. The market value M is $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Hand written solutions are strictly prohibited

!
Required information
A theft-avoidance locking system has a first cost of $31,000, an AOC of $9,000, and no salvage value after its 3-year
life. Assume that you were told the service provided by this asset would be needed for only 5 years. This means that
the asset will have to be repurchased and kept for only 2 years.
What would its market value, call it M, have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle
at an interest rate of 10% per year? Determine the market value M using factors.
The market value M is $

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