Problem
A machine tool, which has been used in a plant for 10 years, is being considered for replacement. It cost $9500 and was depreciated by MACRS depreciation using a 5-year recovery period. An equipment dealer indicates that the machine has no resale value. Maintenance on the machine tool has been a problem, with an $800 cost this year. Future annual maintenance costs are expected to be higher. What is the economic life of this machine tool if it is kept in service?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.