An Equipment Cost $80,000 Initially

Multiple Choice

An equipment cost $80,000 initially. The market value has been declining at the rate of $15,000 yearly. The O & M costs in year 1 were $10,000 and have been increasing by $2,000 from year 2. Determine the minimum cost life of this equipment for a MARR of 10 %.

A) 4 years
B) 2 year
C) 1 year
D) 5 years