5. Sarah Miller is an engineer trying to determine the economic life of a new...
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Accounting
5. Sarah Miller is an engineer trying to determine the economic life of a new metal press. The press costs $10,000 initially. First year maintenance cost is $1,000. Maintenance cost is forecast to increase $1,000 per year for each year after the first. The interest rate is 15%. Fill in the table below and determine the economic life of the press. e Consider only maintenance and capital recovery in your analysis. EUAC = Equivalent Uniform Annual Cost. Economic life is point at which the total EUAC is at minimum EUAC of Maintenance Total EUAC MaintenanceEUAC of Year Cost Capital Recove $ 1000 $ 2000 $ 3000 $ 4000 $ 5000 $ 6000 $ 7000 $ 8000 2 3 4 7 Show formula Sarah used to calculate EUAC of Capital recovery and a sample calculation for one of the years. Show formula Sarah used to calculate EUAC of Maintenance and a sample calculation for one of the years
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