An Asset Has an Initial Cost of $10 000

Multiple Choice

An asset has an initial cost of $10 000. Its maintenance costs are $300 in the first year, and go up by 20% per year thereafter. Its salvage value declines by straight-line depreciation over ten years. If your MARR is 10%, what is its economic life?

A) 2 years
B) 3 years
C) 4 years
D) 5 years
E) 6 years