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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 $38,500; 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 18%, when should the old assembly machine be replaced? Use the following data table for your analysis. Challenger Defender Year Market Value O&M Costs Market Value O&M Costs $38,500 30,000 26.000 $26,000 16,500 $13,500 $8,500 12,500 1 2 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year.

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 $38,500; 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 18%, when should the old assembly machine be replaced? Use the following data table for your analysis. Challenger Defender Year Market Value O&M Costs Market Value O&M Costs $38,500 30,000 26.000 $26,000 16,500 $13,500 $8,500 12,500 1 2 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
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 $38,500; 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 18%, when should the old assembly machine be replaced? Use the following data table for your analysis. Challenger Defender Year Market Value O&M Costs Market Value O&M Costs $38,500 $26,000 1 30,000 $8,500 16,500 $13,500 2 26,000 12,500 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year.
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 $38,500; 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 18%, when should the old assembly machine be replaced? Use the following data table for your analysis. Challenger Defender Year Market Value O&M Costs Market Value O&M Costs $38,500 $26,000 1 30,000 $8,500 16,500 $13,500 2 26,000 12,500 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year.
The minimum EUAC value of the challenger is $ (Round to the nearest dollar.) The marginal cost of keeping the defender in service for one more year is $ . (Round to the nearest dollar.) The old assembly machine should be replaced
Transcribed Image Text:The minimum EUAC value of the challenger is $ (Round to the nearest dollar.) The marginal cost of keeping the defender in service for one more year is $ . (Round to the nearest dollar.) The old assembly machine should be replaced
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