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An elevator system in an office building can either be refurbished or replaced. Refurbishing the If elevators will cost $55,000 and extend the life of
An elevator system in an office building can either be refurbished or replaced. Refurbishing the If elevators will cost $55,000 and extend the life of the elevators another 20 years. Salvage value at the end of 20 years will be $11,000. Annual maintenance costs will be $1,000 per year. The current salvage value of the elevators is $32,000. Replacing the elevator system will cost $140,000, with an expected life of 50 years. Maintenance costs will be $400 per year. Salvage value at the end of 50 years will be $28,000. Interest is 4% The annual cost for refurbishing the elevators is: (A) $4, 680 (B) $5, 930 (C) $7, 030 (D) $8, 240 The annual cost for replacing the elevators is: A) $5, 840 (B) $6, 340 (C) $6, 540 (D) $6, 740
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