Determine the economic service life of the asset

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Reference no: EM132009102

A new asset is available for $220,000. O&M costs are $22,000 each year for the first five years. $24,000 in year 6, $28,000 in year 7, and $30,000 in year 8. Salvage values are estimated to be $150,000 after one year and will decrease at the rate of 20% per year thereafter. At a MARR of 10%, determine the economic service life of the asset.

Reference no: EM132009102

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