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A presently owned machine (Defender) has a useful life of 3 more years. Annual worth calculations for 1, 2, and 3 years are made and the following results are obtained. AW1 = $ 42,400 AW2= $44,590 AW3 = $47,356 A new improved machine (Challenger) that can be purchased will have a maximum useful life of 4 years. Annual worth calculations for 1, 2, 3, and 4 years yield the following results. AW1 = $85,000 AW2 = $53,571 AW3 = $43,127 AW4 = $37,928 when should the presently owned machine (Defender) be replaced? Select one: a. Replace now b. Replace 1 year later c. Replace 3 years later d. Replace 4 years later e. Replace 2 years later

A presently owned machine (Defender) has a useful life of 3 more years. Annual worth calculations for 1, 2, and 3 years are made and the following results are obtained. AW1 = $ 42,400 AW2= $44,590 AW3 = $47,356 A new improved machine (Challenger) that can be purchased will have a maximum useful life of 4 years. Annual worth calculations for 1, 2, 3, and 4 years yield the following results. AW1 = $85,000 AW2 = $53,571 AW3 = $43,127 AW4 = $37,928 when should the presently owned machine (Defender) be replaced? Select one: a. Replace now b. Replace 1 year later c. Replace 3 years later d. Replace 4 years later e. Replace 2 years later

Essentials Of Investments
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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A presently owned machine (Defender) has a useful life of 3 more years. Annual worth calculations for 1, 2, and 3 years are made and the following results are obtained.

AW1 = $ 42,400

AW2= $44,590

AW3 = $47,356

A new improved machine (Challenger) that can be purchased will have a maximum useful life of 4 years. Annual worth calculations for 1, 2, 3, and 4 years yield the following results.

AW1 = $85,000

AW2 = $53,571

AW3 = $43,127

AW4 = $37,928

when should the presently owned machine (Defender) be replaced?

Select one:

a. Replace now

b. Replace 1 year later

c. Replace 3 years later

d. Replace 4 years later

e. Replace 2 years later

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