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Salvage value: You are involved with a project that is expected to last 50 years and have a salvage value of $10 million. A consultant
Salvage value: You are involved with a project that is expected to last 50 years and have a salvage value of $10 million. A consultant has advised your company that an expenditure of only $100,000 at the end of every 5 years will double the salvage value. Your company generally uses a MARR of 15%do you buy the consultants recommendation? 2. Bonds: A bond has an initial purchase price of $1,000 and an interest rate of 6% paid at the end of each year for 30 years. At the end of year 30, the bond is redeemed and the owner is repaid the initial payment of $1,000. a) What is the value of the bond at the beginning of year 6 to someone with a MARR of 7%? At the beginning of year 29? b) What is the value of the bond at the beginning of year 6 to someone with a MARR of 5%? At the beginning of year 29
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