Problem 5: a. An equipment cost $80,000. The market value has been declining at the rate of $15,000 yearly. The O & M co

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Problem 5 A An Equipment Cost 80 000 The Market Value Has Been Declining At The Rate Of 15 000 Yearly The O M Co 1 (56.53 KiB) Viewed 59 times

Problem 5: a. An equipment cost $80,000. The market value has been declining at the rate of $15,000 yearly. The O & M costs in year 1 were $10,000 and have been increasing by $2,000 from year 2. Determine the minimum cost life of this equipment for a MARR of 10%. b. The O&M cost of an equipment is given in the table below. Determine the EUAC of this equipment in year 6. Assume a MARR of 8%. Year 1 2 3 4 5 6 O & M Cost $8,000 7,500 $6,000 $5,500 $4,500 8,000 Chapter 14 Problem 6: Your friend bought a rental property for 500,000 five years ago. she sold the property this year for $2,200,000 and spent $250,000 fixing it up before selling the property. If the inflation rate for the past 5 years has been steady at 4% annually, compute the after-tax real rate of return (i ') on this investment. Assume a capital gain tax of 15%.