Question: A company is considering buying a new machine. Two different models are available on the market. MARR is 8%.
a. Assuming sum-of-years digits depreciation, what book value will Model -I have after two years?
b. Assuming double declining balance depreciation, what book value will Model- II have after three years?
c. What salvage value (S) must Model -I have after 20 years in order for the equivalent uniform annual cost to equal $27,000?