Question

A factory asset has a first cost of $100,000,0 annual costs of $15,000 the first year andincreasing by 7.5% per year, and a salvage(market) value that decreases by 20% per yearover its 5-year life. The minimum cost economiclife of the asset is what value? Interest is 10%. (а) 2 years(b) 3 years(c) 4 years(d) 5 years

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