1. The EUAC of the challenger for the two years of service is OA. $29,760 OB. $30,300 OC. $27,300 O D. $24,800 O E. $36,065 2. The marginal cost of keeping the defender in service for one more year is OA. $29,000 O B. $24,000 OC. $33,000 O D. $11,400 OE. $13,000
1. The EUAC of the challenger for the two years of service is OA. $29,760 OB. $30,300 OC. $27,300 O D. $24,800 O E. $36,065 2. The marginal cost of keeping the defender in service for one more year is OA. $29,000 O B. $24,000 OC. $33,000 O D. $11,400 OE. $13,000
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 14P
Related questions
Question
Qd 175.
![A high-speed electronic assembly machine was purchased four years ago for $50,000. At the present time, it can be sold for $25,000 or it can be kept in service for one more year with cash flows as shown in the
table (defender). The potential challenger to replace this machine has a purchase price of $41,500 and a usefule life of not more than 2 years with cash flows as shown in the table. If the before-tax MARR is 20%, answer
the two questions below:
Market Value
$41.500
34,000
$9,000
14,500
25,000
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 20% per year.
1. The EUAC of the challenger for the two years service is
OA. $29,760
OB. $30,300
OC. $27,300
OD. $24,800
OE. $36,065
Year
0
1
2
Challenger
2. The marginal cost of keeping the defender in service for one more year is
OA. $29,000
OB. $24,000
OC. $33,000
O D. $11,400
OE. $13,000
O&M Costs
Defender
Market Value
$25,000
17,000
O&M Costs
$16,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc6f999b7-6deb-4015-91d6-5f59e418959d%2Fe7f1afc6-af6b-436b-b6dc-bc4a755a1b01%2Fucj3z9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A high-speed electronic assembly machine was purchased four years ago for $50,000. At the present time, it can be sold for $25,000 or it can be kept in service for one more year with cash flows as shown in the
table (defender). The potential challenger to replace this machine has a purchase price of $41,500 and a usefule life of not more than 2 years with cash flows as shown in the table. If the before-tax MARR is 20%, answer
the two questions below:
Market Value
$41.500
34,000
$9,000
14,500
25,000
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 20% per year.
1. The EUAC of the challenger for the two years service is
OA. $29,760
OB. $30,300
OC. $27,300
OD. $24,800
OE. $36,065
Year
0
1
2
Challenger
2. The marginal cost of keeping the defender in service for one more year is
OA. $29,000
OB. $24,000
OC. $33,000
O D. $11,400
OE. $13,000
O&M Costs
Defender
Market Value
$25,000
17,000
O&M Costs
$16,000
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