Basics of Engineering Economy 1st Edition by Leland Blank,Anthony Tarquin

Exercise 6

To improve package tracking at a UPS transfer facility, conveyor equipment was upgraded with RFID sensors at a cost of $45,000.The operating cost is expected to be $48,000 per year for the first 3 years and $10,000 for the next 3 years.The salvage value of the equipment is expected to be $40,000 for the first 3 years, but due to obsolescence, it won't have a significant value after that.At an interest rate of 10% per year, determine the economic service life of the equipment and the associated annual worth.