A machine purchased a year ago for $85,000 costs more to operate than anticipated. At the time of the purchase, it was expected to be used for 10 years with annual maintenance costs of $22,000 and a salvage value of $10,000. However, last year, it incurred a cost $40,000, which is expected to escalate to $41,200 this year and increase by $1,200 each year thereafter. The market value is now estimated to be $74,000-$10,000k, where k is the number of years since the machine was purchased. It is now estimated that the machine will be useful for a maximum of 5 more years. A replacement study is to be performed. Determine the values of P. n. AOC for year 5 and S of this defender. The value of Pis $ The value of n is The AOC for year 5 is The value of S is $ years. U
A machine purchased a year ago for $85,000 costs more to operate than anticipated. At the time of the purchase, it was expected to be used for 10 years with annual maintenance costs of $22,000 and a salvage value of $10,000. However, last year, it incurred a cost $40,000, which is expected to escalate to $41,200 this year and increase by $1,200 each year thereafter. The market value is now estimated to be $74,000-$10,000k, where k is the number of years since the machine was purchased. It is now estimated that the machine will be useful for a maximum of 5 more years. A replacement study is to be performed. Determine the values of P. n. AOC for year 5 and S of this defender. The value of Pis $ The value of n is The AOC for year 5 is The value of S is $ years. U
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:A machine purchased a year ago for $85,000 costs more to operate than anticipated. At the time of the purchase, it was expected to
be used for 10 years with annual maintenance costs of $22,000 and a salvage value of $10,000. However, last year, it incurred a cost
$40,000, which is expected to escalate to $41,200 this year and increase by $1,200 each year thereafter. The market value is now
estimated to be $74,000-$10,000k, where k is the number of years since the machine was purchased. It is now estimated that the
machine will be useful for a maximum of 5 more years. A replacement study is to be performed. Determine the values of P. n. AOC for
year 5 and 5 of this defender.
The value of Pis $[
The value of n is
The AOC for year 5 is[
The value of Sis $
years.
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