System 2 - 100,000 System 1 First cost, $ - 50,000 AOC, $ per year Salvage value, $ Rework at midlife, $ -6,000 -1,500 30,000 -17,000 - 30,000 Life, years 4 12

Accounting
27th Edition
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Chapter10: Long-term Assets: Fixed And Intangible
Section: Chapter Questions
Problem 10.5CP: Communication Godwin Co. owns three delivery trucks. Details for each truck at the end of the most...
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Determine if the selection of system 1 or 2 is sensitive to variation in the return required by management. The corporate MARR ranges from 8% to
16% per year on different projects. Use tabulated factors or a spreadsheet, as requested by your instructor.

System 2
- 100,000
System 1
First cost, $
- 50,000
AOC, $ per year
Salvage value, $
Rework at midlife, $
-6,000
-1,500
30,000
-17,000
- 30,000
Life, years
4
12
Transcribed Image Text:System 2 - 100,000 System 1 First cost, $ - 50,000 AOC, $ per year Salvage value, $ Rework at midlife, $ -6,000 -1,500 30,000 -17,000 - 30,000 Life, years 4 12
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