1.From the data shown, the economic service life of the asset is ? (Note: AW val

Question

1.From the data shown, the economic service life of the asset is ?

(Note: AW values represent values if asset is retained for number of years shown in left hand column)

A) 1year B) 2 ears C) 3 years D) 4 years E) 5 years

    Years                    AW of                         AW of                               AW of

        Retained               First Cost, $                    Operating Cost, $               Salvage Value, $

              1                    -165,000                     -36,000                                 99,000

              2                        -86,429                    -36,000                                 38,095

              3                        -60,317                    -42,000                                 18,127

              4                        -47,321                    -43,000                                   6,464

              5                        -39,570                    -48,000                                   3,276

Explanation / Answer

4 year is most economical.

so answer is D.

year first cost operating cost salvage value total cost - salvage 1 -165000 -36000 99000 -102000 2 -86429 -36000 38095 -84334 3 -60317 -42000 18127 -84190 4 -47321 -43000 6464 -83857 5 -39570 -48000 3276 -84294

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.