Problem

A piece of equipment costs a company $250,000 when new and 7 years later is worth $180,0...

A piece of equipment costs a company $250,000 when new and 7 years later is worth $180,000. The company uses a linear depreciation model to value the equipment.

a. Express the value of the equipment as a function of the age and sketch a graph of the function.

b. The company has decided to keep the equipment as long as the value remains above $70,000. When should the company sell or trade in the equipment?

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Solutions For Problems in Chapter 1.7