2) An existing machine in the factory has an annual maintenance cost of 40,000. A new and more efficient machine will require an investment of 90,000 and it is estimated to have a salvage value of 30,000 at the end of 8 years. Its annual expenses for maintenance is 22,000. If the company's MARR is 12%, will it be worthwhile to purchase the new machine using (a) Present Worth Method? (B method?
2) An existing machine in the factory has an annual maintenance cost of 40,000. A new and more efficient machine will require an investment of 90,000 and it is estimated to have a salvage value of 30,000 at the end of 8 years. Its annual expenses for maintenance is 22,000. If the company's MARR is 12%, will it be worthwhile to purchase the new machine using (a) Present Worth Method? (B method?
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 5P
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