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

Exercise 9

A bulldozer with a first cost of $0,000 may be used for a maximum of 6 years.Its salvage value, which decreases by 15% per year, is described by the equation S = 70,000(1 ? 0.15) n , where n is the number of years after purchase.The operating cost of the dozer will be constant at $5,000 per year.At an interest rate of 12% per year, what is the economic service life of the machine? What is the associated AW value?