Economic Life Answers

 

 

 

1.a.

NAC 1 = 50000(A/P, .1, 1) + 10,000 = 65000
NAC 2 = 50000(A/P, .1, 2) + 10000 + 30000(A/G, .1, 2) = 53090
NAC 3 = 50000(A/P, .1, 3) + 10000 + 30000(A/G, .1, 3) = 58215
The economic life is two years.

1.b.

NAC 1 = 50000(A/P, .1, 1) + 10,000 - 30000(A/F, .1, 1) = 35000
NAC 2 = 50000(A/P, .1, 2) + 10000 - 20000(A/F, .1, 2) = 29286
NAC 3 = 50000(A/P, .1, 3) + 10000 = 30105
The economic life is two years.