A high-speed electronic assembly machine was purchased two years ago for $50,000. At the present time, it can be sold for $27,000 and replaced by a newer model having a purchase price of $44,000; 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%, answer the following two questions: Challenger O&M Costs Year Market Value 0 $44,000 1 2 34,000 27,000 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. $12,000 13,000 Defender Market Value $27,000 19,000 O&M Costs $14,000 1. The minimum EUAC value of the challenger is ○ A. $30,390 B. $25,771 ○ C. $30,554 D. $27,280 ○ E. $24,080 2. The marginal cost of keeping the defender in service for one more year is OA. $33,000 B. $25,240 C. $10,280 OD. $11,240 O E. $22,000

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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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 $27,000 and replaced by a newer model having a purchase price of $44,000; 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%, answer the following two questions:
Challenger
O&M Costs
Year
Market Value
0
$44,000
1
2
34,000
27,000
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year.
$12,000
13,000
Defender
Market Value
$27,000
19,000
O&M Costs
$14,000
1. The minimum EUAC value of the challenger is
○ A. $30,390
B. $25,771
○ C. $30,554
D. $27,280
○ E. $24,080
2. The marginal cost of keeping the defender in service for one more year is
OA. $33,000
B. $25,240
C. $10,280
OD. $11,240
O E. $22,000
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 $27,000 and replaced by a newer model having a purchase price of $44,000; 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%, answer the following two questions: Challenger O&M Costs Year Market Value 0 $44,000 1 2 34,000 27,000 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. $12,000 13,000 Defender Market Value $27,000 19,000 O&M Costs $14,000 1. The minimum EUAC value of the challenger is ○ A. $30,390 B. $25,771 ○ C. $30,554 D. $27,280 ○ E. $24,080 2. The marginal cost of keeping the defender in service for one more year is OA. $33,000 B. $25,240 C. $10,280 OD. $11,240 O E. $22,000
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