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The rate of snow fall in a northern state has been dropping over the past 20 years. A snow removal service has a snow shovel
The rate of snow fall in a northern state has been dropping over the past 20 years. A snow removal service has a snow shovel currently valued at $10,000, which it has been using to clear snow for a fee each Winter. The useful life of the snow shovel is 6 years. The service has a dwindling customer base due to lower snowfall, thus reduced revenues and salvage values (see table below). So, the service plans to abandon the snow shovel. In what year should the service abandon the snow shovel if their MARR is 20%? Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Revenues $8,000 $7,500 $4,000 $3,500 $1,000 $500 Salvage Value $8,000 $7,000 $3,000 $1,500 $1,000 $0
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