k, where k is the number of years since it was purchased. The salvage value cannot go below zero.The AOC series is estimated using AOC= 60,000 +10,000 k. The interest rate is 15% per year. Deter-mine the economic service life (a) by hand solution,using regular AW computations, and (b) by spread-sheet, using annual marginal cost estimates.
Fig: 1