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Contemporary Engineering Economics 6th Edition by Chan Park
Edition 6ISBN: 978-0134105598Contemporary Engineering Economics 6th Edition by Chan Park
Edition 6ISBN: 978-0134105598 Exercise 23
The University Resume Service has just invested $8,000 in a new desktop publishing system. From past experience, the owner of the company estimates its after-tax cash returns as
A n = $8,000 - $4,000(1 + 0.I5) n -1 ,
S n = $6,000(1 - 0.3) n
where A n stands for the net after-tax cash flows from operation of the system during period n and S n stands for the after-tax salvage value at the end of period n.
(a) If the company's MARR is 12%, compute the economic service life of the system.
(b) Explain how the economic service life varies with the interest rate.
A n = $8,000 - $4,000(1 + 0.I5) n -1 ,
S n = $6,000(1 - 0.3) n
where A n stands for the net after-tax cash flows from operation of the system during period n and S n stands for the after-tax salvage value at the end of period n.
(a) If the company's MARR is 12%, compute the economic service life of the system.
(b) Explain how the economic service life varies with the interest rate.
Explanation
Verified
Verified
Annual Equivalent Cost method is used wh...
Contemporary Engineering Economics 6th Edition by Chan Park
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