What is the economic life of the computer

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Reference no: EM132002488

A new computer costs $4 000. It depreciates at a declining-balance rate of 15 percent per year. The computer maintenance costs are $200 in the first year increasing by 50% per year thereafter. Calculate the EAC over the first five years of the computer's life, assuming a 20% interest rate. What is the economic life of the computer? Construct a table that has the following headings: Year, Salvage Value, EAC (Capital), EAC (Maintenance), and EAC Total.

Reference no: EM132002488

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