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Question 6.T-Y-S.I: Refer to Problem 6-H. Which thickness would you recommend if...

Refer to Problem 6-H. Which thickness would you recommend if the study period was 4 years? Use the imputed market value technique to estimate the market value of the 5 \mathrm{~cm} alternative after 4 years. (6.5)

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C R_{5 \mathrm{~cm}}(15 \%)=\$ 40,000(A / P, 15 \%, 6)=\$ 10,568

\mathrm{MV}_{5 \mathrm{~cm}} after 4 years =\$ 10,568(P / A, 15 \%, 2)=\$ 17,180

\operatorname{AW}_{5 \mathrm{~cm}}(15 \%)=-\$ 40,000(A / P, 15 \%, 4)+\$ 7,500+\$ 17,180(A / F, 15 \%, 4) =-\$ 3,071

Still recommend 2 \mathrm{~cm} thickness.

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