A Communication System Cost $65 000 to Buy and $4

question 51

Essay

A communication system cost $65 000 to buy and $4 000 to install ten years ago. Currently the ten-year-old system can be sold for $7 000, but it will cost $1 000 to remove it. If it's sold in a year's time, the net income, after paying removal costs, will be $1 000. A new communication system costs $50 000 plus $500 to install it. Assuming 5% depreciation rate for the new system, 7% annual interest rate, by how much would the operating costs of the old system have to exceed operating costs of the new one for the old system to be replaced immediately?

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Definitions:

Vulnerability

The susceptibility to physical or emotional injury or attack; it can also refer to a person's increased risk of developing a disorder or illness.

Temporal Lobes

The regions of the cerebral cortex located beneath the lateral fissure on both cerebral hemispheres of the brain, involved in processing auditory information and encoding memory.

Hallucinations

Perceptual experiences without an external stimulus, commonly associated with mental disorders or neurological conditions.