Economics

Kumar has a Television that he has been using for 2 years, and he thinks the Tv will work for 13 years more if serviced for amount of A ($) each year.

kumar is also considering to buy a new Tv instead of using the old Tv.

The new Tv has a useful life of 13 years and it has the following details.

• Initial Cost= 5100$

• Salvage Value = 1450$

• Annual maintenance cost

First 8 years =260$

After 8th year = 400$

How much should the annual maintenance cost (A$) of the existing TV be at least so that buying and using the new TV can be more attractive?