Contemporary Engineering Economics 6th Edition by Chan Park

تمرين 23

The University Resume Service has just invested $8,000 in a new desktop publishing system. From past experience, the owner of the company estimates its after-tax cash returns as
A n = $8,000 - $4,000(1 + 0.I5) n -1 ,
S n = $6,000(1 - 0.3) n
where A n stands for the net after-tax cash flows from operation of the system during period n and S n stands for the after-tax salvage value at the end of period n.
(a) If the company's MARR is 12%, compute the economic service life of the system.
(b) Explain how the economic service life varies with the interest rate.