A machine was purchased and installed 6 years ago for $50000 with a useful life of 10 years. The salvage value is now $5500 and decreasing at a rate of $500 per year. The machine has a maintenance cost of $2000 per year. Assuming a 12.4% MARR, should the company replace the machine this year with a potential new machine that has a EUAC of $3000 per year? (show your work)
A machine was purchased and installed 6 years ago for $50000 with a useful life of 10 years. The salvage value is now $5500 and decreasing at a rate of $500 per year. The machine has a maintenance cost of $2000 per year. Assuming a 12.4% MARR, should the company replace the machine this year with a potential new machine that has a EUAC of $3000 per year? (show your work)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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: A machine was purchased and installed 6 years ago for $50000 with a useful life of 10 years. The salvage value is now $5500 and decreasing at a rate of $500 per year. The machine has a maintenance cost of $2000 per year. Assuming a 12.4% MARR, should the company replace the machine this year with a potential new machine that has a EUAC of $3000 per year? (show your work)
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