Essay
The University has just invested $9 000 in a new desktop publishing system. From past experience, annual cash returns are estimated asA(t)= $8000 - $4000(1 + 0.15)t-1S(t)= $6000(1 - 0.3)twhere A(t)stands for the net cash flow in period t and S(t)stands for the salvage value at the end of year t, and t ≥ 1.If the MARR is 12%, compute the annual equivalent cost in year 2
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We calculate salvage value in year 2 as
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