Estimate salvage value after four years of operationEconometrics
Nan King Furniture owns and operates an industrial lift truck in their warehousing operation. The record indicates that the lift truck was purchased four years ago at $12,000. The estimate salvage value is $3,000 after four years of operation.
First-year O&M expenses were $2,500, but the O&M expenses have increased by $500 each year for the first four years of operation. Using i = 12% compute the annual equivalent costx of the lift truck for four years on a before-tax basis.
