A high-speed electronic assembly machine was purchased two years ago for $50,000. At the present time, it can be sold for $26,000 and replaced by a newer model having a purchase price of $37,500; or it can be kept in service for a maximum of one more year. The new assembly machine, if purchased, has a useful life of not more than two years. If the before-tax MARR is 12%, when should the old assembly machine be replaced? Use the following data table for your analysis. Challenger Defender Year 0 1 2 Market Value $37,500 31,000 26,000 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. O&M Costs The minimum EUAC value of the challenger is $ $11,500 13,000 Market Value $26,000 16,500 (Round to the nearest dollar.) O&M Costs $15,500
A high-speed electronic assembly machine was purchased two years ago for $50,000. At the present time, it can be sold for $26,000 and replaced by a newer model having a purchase price of $37,500; or it can be kept in service for a maximum of one more year. The new assembly machine, if purchased, has a useful life of not more than two years. If the before-tax MARR is 12%, when should the old assembly machine be replaced? Use the following data table for your analysis. Challenger Defender Year 0 1 2 Market Value $37,500 31,000 26,000 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. O&M Costs The minimum EUAC value of the challenger is $ $11,500 13,000 Market Value $26,000 16,500 (Round to the nearest dollar.) O&M Costs $15,500
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![A high-speed electronic assembly machine was purchased two years ago for $50,000. At the present time, it can be sold for $26,000 and replaced by a newer model
having a purchase price of $37,500; or it can be kept in service for a maximum of one more year. The new assembly machine, if purchased, has a useful life of not
more than two years. If the before-tax MARR is 12%, when should the old assembly machine be replaced? Use the following data table for your analysis.
Challenger
Defender
O&M Costs
$11,500
13,000
Year
0
Market Value
$37,500
31,000
1
2
26,000
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year.
The minimum EUAC value of the challenger is $
Market Value
$26,000
16,500
(Round to the nearest dollar.)
O&M Costs
$15,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb0592a4-88c0-4a22-b32f-9a31709ba17f%2F05d6cbb2-8d98-472f-9980-6f08e820d255%2F00bgvv_processed.png&w=3840&q=75)
Transcribed Image Text:A high-speed electronic assembly machine was purchased two years ago for $50,000. At the present time, it can be sold for $26,000 and replaced by a newer model
having a purchase price of $37,500; or it can be kept in service for a maximum of one more year. The new assembly machine, if purchased, has a useful life of not
more than two years. If the before-tax MARR is 12%, when should the old assembly machine be replaced? Use the following data table for your analysis.
Challenger
Defender
O&M Costs
$11,500
13,000
Year
0
Market Value
$37,500
31,000
1
2
26,000
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year.
The minimum EUAC value of the challenger is $
Market Value
$26,000
16,500
(Round to the nearest dollar.)
O&M Costs
$15,500
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