the economic life of the equipment N=√2(P-LN)/λ, λ is the inferior value of the equipment
the inferior value is 18. So n = [2 (1-1)/18] 1/2 = 1 years
For example:
With the use of equipment, the annual depreciation is getting less and less, and the operating cost is getting bigger and bigger. Let the equipment be used for x years
(1-1)/x = 6. x< 6
when x = 5, the fifth year depreciation+operating cost Dao = (1-1)/5+6+18 * 5 = 33,
x=6, and the sixth year depreciation+operating cost = (1-1)/6+.
Extended information:
Annual average use cost CN=(P-LN)/N+1/N×∑Ct, where the annual average use cost of equipment in CNN is the actual value of equipment, Ct is the operating cost of equipment in the t year, and LN is the net residual value of equipment at the end of n. (P-LN)/N is the average annual asset consumption cost of equipment, and 1/N×∑Ct is the average annual operating cost of equipment.
The longer the equipment is used, the more serious the visible and invisible wear of the equipment will be, which will lead to the more maintenance cost of the equipment. This year-by-year increasing cost ΔCt is called the inferior equipment. The method of expressing equipment loss with inferior value is called inferior value method.
Baidu Encyclopedia-Economic Life of Equipment