9-16. Consider a piece of equipment that initially cost

$8,000 and has these estimated annual expenses and MV:

End of Annual MV at End Year, k Expenses of Year 1 $3,000 $4,700 2 3,000 3,200 3 3,500 2,200 4 4,000 1,450 5 4,500 950 6 5,250 600 7 6,250 300 8 7,750 0 If the after-tax MARR is 7% per year, determine the after-tax economic life of this equipment. MACRS

(GDS) depreciation is being used (five-year property class). The effective income tax rate is 40%. (9.9)