Economic Service Life

My car is worth LE 80,000 today and its value is expected to decrease by 10,000 every year.  Annual expenses follow the schedule below. Determine the Economic service life of the car.

Year

0

1

2

3

4

5

Market Value

 

 

 

 

 

 

O&M Expenses

 

3000

3000

6000

7000

7000

Solution