Herald Richter and Associates, 5 years ago, purchased for $45,000 a microwave signal graphical plotter for corrosion

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Herald Richter and Associates, 5 years ago, purchased for $45,000 a microwave signal graphical plotter for corrosion detection in concrete structures. It is expected to have the market values and annual operating costs shown below for its remaining useful life of up to 3 years. It could be traded now at an appraised market value of $8000.


Herald Richter and Associates, 5 years ago, purchased for $45,00


A replacement plotter with new Internet-based, digital technology costing $125,000 has an estimated $10,000 salvage value after its 5-year life and an AOC of $31,000 per year. At an interest rate of 15% per year, determine how many more years Richter should retain the present plotter. Solve
(a) By hand
(b) By using aspreadsheet.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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Engineering economy

ISBN: 978-0073376301

7th Edition

Authors: Leland Blank, Anthony Tarquin

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