The acquisition cost of a bus is $100,000. The trend in operating costs can be given...

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The acquisition cost of a bus is $100,000. The trend in operating costs can be given by the equation $/km 0.5+5 10-6 d where d is the number of kilometers traveled from new. A bus travels an average of 80,000 km per year, and it does not depend on the bus's age. The trend in resale value for a bus in its first 5 years of life is given in Table 4.22. TABLE 4.22 Bus Resale Values Year Resale Value ($) 1 75,000 2 60,000 3 30,000 4 10,000 5 5000 a. Making appropriate assumptions, construct a model that could be used to determine the economic life of a bus. b. Using the model constructed in (a), along with previous data, and taking i to be 10% per annum, what is the economic life of a bus? The acquisition cost of a bus is $100,000. The trend in operating costs can be given by the equation $/km 0.5+5 10-6 d where d is the number of kilometers traveled from new. A bus travels an average of 80,000 km per year, and it does not depend on the bus's age. The trend in resale value for a bus in its first 5 years of life is given in Table 4.22. TABLE 4.22 Bus Resale Values Year Resale Value ($) 1 75,000 2 60,000 3 30,000 4 10,000 5 5000 a. Making appropriate assumptions, construct a model that could be used to determine the economic life of a bus. b. Using the model constructed in (a), along with previous data, and taking i to be 10% per annum, what is the economic life of a bus?