question archive An asset purchased 2 years ago for $40,000 is harder to maintain than expected
An asset purchased 2 years ago for $40,000 is harder to maintain than expected
Subject:EconomicsPrice: Bought3
An asset purchased 2 years ago for $40,000 is harder to maintain than expected. It can be sold now for $12,000 or kept for a maximum of 2 more years, in which case its operating cost will be $20,000 each year, with a salvage value of $10,000 at the end of year two. A suitable challenger will have an initial cost of $65,000, an annual cost of $15,000, and a salvage value of $18,000 after its 5 year life. Determine the RV of the defender that will render its AW equal to that of the challenger, using an interest rate of 10% per year. $24,338 $24,228 $20,228 $22,228
