Calumet Electronics purchased a device for $75,000 four years ago (existing device). The company is considering purchasing a new device, that will cost $92,000. Assume the company has a MARR of 12% per year, compounded annually. The new device can be purchased for $92,000 with annual operating and maintenance expenses of $1,184 per year. At the end of 4 years, the company can sell the new device for $45,678. The new device also requires a one-time expense of $2,791 at the end of year 4 to install new software prior to selling it. What is the equivalent uniform annual cost of the new device if it is kept in service for 4 years?
Calumet Electronics purchased a device for $75,000 four years ago (existing device). The company is considering purchasing a new device, that will cost $92,000. Assume the company has a MARR of 12% per year, compounded annually. The new device can be purchased for $92,000 with annual operating and maintenance expenses of $1,184 per year. At the end of 4 years, the company can sell the new device for $45,678. The new device also requires a one-time expense of $2,791 at the end of year 4 to install new software prior to selling it. What is the equivalent uniform annual cost of the new device if it is kept in service for 4 years?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Calumet Electronics purchased a device for $75,000 four years ago (existing device). The company is considering purchasing a new device, that will cost $92,000. Assume the company has a MARR of 12% per year, compounded annually. The new device can be purchased for $92,000 with annual operating and maintenance expenses of $1,184 per year. At the end of 4 years, the company can sell the new device for $45,678. The new device also requires a one-time expense of $2,791 at the end of year 4 to install new software prior to selling it.
What is the equivalent uniform annual cost of the new device if it is kept in service for 4 years?
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