Salvage value pw is 10% of the first cost

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Reference no: EM131807385

A common standard of significant change is 10%. A project's first cost is $20,000, the expected life is 15 years, and the interest rate is 8%.

(a) How large must the salvage value be so that its PW is 10% of the first cost?

(b) If the salvage value is $4000, how short must the life be so that the salvage value's PW is 10% of the first cost?

(c) If the salvage value is $4000, how low must the interest rate be so that the salvage value's PW is 10% of the first cost?

Reference no: EM131807385

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