Agranary purchases a conveyor used in the manufacture of grain for transporting fillin or emptying. It is purchased and installed for $80,000 with a market value for salvage purposes that decreases at a rate of 20% per year with a minimum of value $1.750. Operation and maintenance is expected to cost $15.000 in the first year, increasing $1.060 per year thereafter. The granary uses a MARR of 15%. What is the optimum replacement interval for the conveyor? years.

Agranary purchases a conveyor used in the manufacture of grain for transporting fillin or emptying. It is purchased and installed for $80,000 with a market value for salvage purposes that decreases at a rate of 20% per year with a minimum of value $1.750. Operation and maintenance is expected to cost $15.000 in the first year, increasing $1.060 per year thereafter. The granary uses a MARR of 15%. What is the optimum replacement interval for the conveyor? years.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6PA: Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one...

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Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 23,000 miles. Calculate the annual depreciation expense.
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