A general manager wants to know the economic service life of currently owned machines. The market value of the machines is $30,000, but this value is expected to decrease as shown in the table below. The maintenance and operating cost associated with each additional year of retention is also shown. Use the company’s MARR of 15% per year to determine the ESL.

Year Market Value, $ M&O cost, $
0 30,000 —
1 25,000 49,000 2 20,000 51,000 3 15,000 53,000 4 10,000 55,000