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The plant manager has just purchased a piece of unusual machinery for $10,000. Its resale value at the end of 1 year is estimated to be $3000, because the device is sought by antique collectors, resale value is rising at the rate of $500 per year. The maintenance cost is expected to be $300 per year for each of the first 3 years, and then it is expected to double each year after that. Thus the fourth-year maintenance will be $600: the fifth-year maintenance, $1200, and so on. Based on a MARR of 15%, what is the economic life of this piece of machinery?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92412074

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