A radiology clinic is considering buying a new $700,000 x-ray machine, which will have no salvage value after installation because the cost of removal will be approximately equal to its sales value. Maintenance is
estimated at $24,000 per year as long as the machine is owned. After 10 years the x-ray source will be depleted and the machine must be scrapped. Which of the following represents the most economic life of this x-ray machine?
a. One year, because it will have no salvage after installation
b. Five years, because the maintenance costs are constant
c. Ten years, because maintenance costs don't increase
d. Cannot be determined from the information given.
Answers: 1
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