The National Potato Cooperative purchased a de-skinning machine last year for $150,000. Revenue for the first year

Question:

The National Potato Cooperative purchased a de-skinning machine last year for $150,000. Revenue for the first year was $50,000. Over the total estimated life of 8 years, what must the remaining equivalent annual revenues (years 2 through 8) equal to break even by recovering the investment and a return of 10% per year? Costs are expected to be constant at $42,000 per year, and a salvage value of $20,000 is anticipated.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...