Question: A piece of equipment has a first cost of $170,000, a maximum useful life of 7 years, and a market (salvage) value described by the relation S = 120,000 - 21,000k, where k is the number of years since it was purchased. The salvage value cannot go below zero. The AOC series is estimated using AOC = 60,000 + 11,000k. The interest rate is 8% per year. Determine the economic service life and the respective AW.
The economic service life is year(s) and the AW value is $ .