You purchased a drill press machine for $50,000. It is expected to have a useful life of 8 years. The accounting department tells you that the annual capital cost is $9,740 at i = 12%. What salvage value is used in obtaining the annual capital cost of this machine?(a) $3,010(b)$4,000(c) $4,997(d)$4,200
You purchased a drill press machine for $50,000. It is expected to have a useful life of 8 years. The accounting department tells you that the annual capital cost is $9,740 at i = 12%. What salvage value is used in obtaining the annual capital cost of this machine?(a) $3,010(b)$4,000(c) $4,997(d)$4,200
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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You purchased a drill press machine for $50,000. It is expected to have a useful life of 8 years. The accounting department tells you that the annual capital cost is $9,740 at i = 12%. What salvage value is used in obtaining the annual capital cost of this machine?
(a) $3,010
(b)$4,000
(c) $4,997
(d)$4,200
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