Find how much is the economic life of the equipment

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Reference no: EM13239939

Special equipment can be designed and built for $80,000. This equipment will have a salvage value of $70,000 in year 1, which will decrease b y $10,000 through year 8. Operation and maintenance costs will start at $18,000 in year 1, and increase by 5% per year through year 8. The organization proposing this design can borrow money with 9% annual interest rate. Using tabular approach, find the economic life of this equipment.

Reference no: EM13239939

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