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A new grape press was purchased for $150,000. The annual operating and maintenance costs for the press are estimated to be $4,000 the first year.
A new grape press was purchased for $150,000. The annual operating and maintenance costs for the press are estimated to be $4,000 the first year. These costs are expected to increase by $5,000 each year after the first year. The market value is expected to decrease by $25,000 each year to a value of zero. (Hint: treat the market value as a salvage value.) Installation and removal of a press each cost $3,500. Using an interest rate of 9%, determine the economic life of the press. (13-13)
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