Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 14

A company just purchased an intelligent robot, which has a first cost of $80,000. Since the robot is unique in its capabilities, the company expects to be able to sell it in 4 years for $95,000.
a) If the company spends $10,000 per year in maintenance and operation of the robot, what will the company's MACRS depreciation charge be in year 2 Assume the recovery period for robots is 5 years and the company's MARR is 16% per year when the inflation rate is 9% per year.
b) Determine the book value of the robot at the end of year 2.