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
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Chapter1: Making Economics Decisions
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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 $
Transcribed Image Text:! 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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