Homework answers / question archive / An asset with an expected life of four years is to be purchased for $5,000

An asset with an expected life of four years is to be purchased for $5,000

Accounting

Share With

An asset with an expected life of four years is to be purchased for $5,000. Annual revenue is estimated at $2,000, with increasing annual expenses of $5400 at retirement. At the end of the fourth year, the asset is expected to be sold for $1,000. The interest rate is 8% compounded annually. Using the Future Worth Method, determine whether the asset should be purchased or not.