Determine the economic service life of asset

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Reference no: EM132023709

A new asset is available for $227,000. O&M costs are $34,000 each year for the first five years, $51,000 in year six, $79,100 in year seven, and $121,800 in year eight. Salvage values are estimated to be $204,000 after one year and will decrease at the rate of 50% per year thereafter. At a MARR of 18%, determine the economic service life of the asset. Enter your answer as an integer from 1 to 8.

Reference no: EM132023709

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