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 $41,500 and a usefule life of not more than 2 years with cash flows. shown in the table. If the before-tax MARR is 20%, answer the two questions below: Market Value $41.500 $9,000 34,000 25,000 14.500 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 Challenger Year 0 1 2 O&M Costs CLIEN Defender Market Value $25,000 17,000 O&M Costs $16,000
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 $41,500 and a usefule life of not more than 2 years with cash flows. shown in the table. If the before-tax MARR is 20%, answer the two questions below: Market Value $41.500 $9,000 34,000 25,000 14.500 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 Challenger Year 0 1 2 O&M Costs CLIEN Defender Market Value $25,000 17,000 O&M Costs $16,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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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