8 years ago a company installed a robot that today has a market value of $60,000 and every year it drops $2000. For example at the end of the first year the market value will be $58,000 and it keeps going down. Maintenance costs for the next 4 years are estimated at $3,000 this year and increasing 10% each year. Determine the marginal cost of extending the service for one year, for the next 4 years if the MARR is 12%. Answer the questions: a) How much money would be the loss of market value in year 1? b) How much money would be lost in interest in year 1? c) How much money would the Marginal Cost be in year 1?
8 years ago a company installed a robot that today has a market value of $60,000 and every year it drops $2000. For example at the end of the first year the market value will be $58,000 and it keeps going down. Maintenance costs for the next 4 years are estimated at $3,000 this year and increasing 10% each year. Determine the marginal cost of extending the service for one year, for the next 4 years if the MARR is 12%. Answer the questions: a) How much money would be the loss of market value in year 1? b) How much money would be lost in interest in year 1? c) How much money would the Marginal Cost be in year 1?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 40P
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