Question

Resale Value Garland Mills purchased a certain piece of machinery 2 years ago for $500,000. Its present resale value is $420,000. Assuming that the machine's resale value decreases exponentially, what will it be (in dollars) 4 years from now? (Round your answer to the nearest dollar.)

Answer 1

Answer:

260,000

Step-by-step explanation:

The value decreases by 40,000 per year (500000-42000/2 years) the value will decrease by 240000 in six (4 years plus 2 years already passed) years. 6 x 40,000 =240000

So, the value should be 260,000 (500000-240000)

Or

year 1 500000-40000=460000

year 2 460000-40000=420000

year 3 420000-40000=380000

year 4 380000-40000=340000

year 5 340000-40000=300000

year 6 300000-40000=260000