: A nuclear company is considering buying a new piece of bench-scale turbine for testing. A 10% interest rate will be used in the computations. Two models of the turbine are available: Turbine A Turbine B Initial cost ($) 80,000 100,000 Salvage value ($) 20,000 25,000 Annual operating/testing cost (S) 18,000 15,000 first 10 years, then 20,000 thereafter Useful life (years) 20 25 a) Determine which turbine should be purchased, based on equivalent uniform annual cost. b) What will be the book value of Turbine A after 2 years, based on sum-of-years-digits depreciation? c) What will be the book value of Turbine B after 3 years, based on double declining balance depreciation?

Problem1: A nuclear company is considering buying a new piece of bench-scale turbine for testing. A 10% interest rate will be used in the computations. Two models of the turbine are available: Turbine A Turbine B Initial cost ($) 80,000 100,000 Salvage value ($) 20,000 25,000 Annual operating/testing 18,000 15,000 first 10 years, then cost (S) 20,000 thereafter Useful life (years) 20 25 a) Determine which turbine should be purchased, based on equivalent uniform annual cost. b) What will be the book value of Turbine A after 2 years, based on sum-of-years'-digits depreciation? c) What will be the book value of Turbine B after 3 years, based on double declining balance depreciation