A CNC machine which was purchased five years ago for $170,000 is being considered for replacement. Its current first cost is estimated to be $130,000. Its AOC is $75,000 in year one and increasing by $4,000 each year. Its salvage value is $15,000 regardless of when the asset is retired. Using a MARR of 10% per year, determine the ESL and the respective AW. Its maximum useful life is three years.

A CNC machine which was purchased five years ago for $170,000 is being considered for replacement. Its current first cost is estimated to be $130,000. Its AOC is $75,000 in year one and increasing by $4,000 each year. Its salvage value is $15,000 regardless of when the asset is retired. Using a MARR of 10% per year, determine the ESL and the respective AW. Its maximum useful life is three years.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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