A milling machine with enhanced CNC controls that allow for high-speed machining of free-form parts was purchased 2 years ago for $195,000. The company wants to purchase a recently available faster model with control up to 8 axes for $240,000. The presently owned machine can be sold today for $105,000. Its operating cost over the past 2 years has been $30,000 per year. The value that should be used as P for the presently owned machine is: (a) $240,000 (b) $195,000 (c) $105,000 (d ) $30,000
A milling machine with enhanced CNC controls that allow for high-speed machining of free-form parts was purchased 2 years ago for $195,000. The company wants to purchase a recently available faster model with control up to 8 axes for $240,000. The presently owned machine can be sold today for $105,000. Its operating cost over the past 2 years has been $30,000 per year. The value that should be used as P for the presently owned machine is: (a) $240,000 (b) $195,000 (c) $105,000 (d ) $30,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A milling machine with enhanced CNC controls
that allow for high-speed machining of free-form
parts was purchased 2 years ago for $195,000. The
company wants to purchase a recently available
faster model with control up to 8 axes for $240,000.
The presently owned machine can be sold today
for $105,000. Its operating cost over the past 2
years has been $30,000 per year. The value that
should be used as P for the presently owned machine
is:
(a) $240,000 (b) $195,000
(c) $105,000 (d ) $30,000
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