Economic life of an asset. Construct an example for determining the remaining economic life of a used asset, on a before-tax basis. Determine the remaining economic life. Use these parameters:

Original purchase cost of asset = 40000 + 1000(5) Current resale value of asset = 20000 + 500(5) Subsequent decline in resale value of asset: each year the resale value of the asset declines by 20% from the previous value. First remaining year operating and maintenance cost = 1000 + 100(3) Annual change in operating and maintenance costs: each year the operating and maintenance costs increase by 15% over the previous year. Operating and maintenance costs occur at the end of the year. MARR = 15 + 7, in percent.