Answer:
salvage value is $16,368.34
Explanation:
given data
initial cost = $182,730
annualized capital cost = $42,442
service life = 7 year
interest rate = 15%
solution
we get here first present value that is
annual value = rate × .................1
put here value and we get
42,442 = 15% ×
solve it we get
present value = $176,576.5343
so
present value = initial investment + salvage value ..............2
we take here present value and initial investment will be negative
-176,576.5343 = -182,730 + salvage value(p/f,15%,7)
-176,576.5343 +182,730 = salvage value(p/f,15%,7)
6,153.465 = salvage value × 0.3759
salvage value = 16,368.34