A small high-speed commercial centrifuge has the following net cash flows and abandonment values over its useful life. The firm's MARR is 8% per year. Determine the optimal time for the centrifugeto be abandoned if its current MV is $8.500 and it won't be used for more than five years.End of Year3$1,700 $1,700$4,1005,300$1,700Annual revenues less expensesAbandonment value of machine" $6,200"Estimated MVClick the icon to view the interest and annuity table for discrete compounding when MARR 8% per year.4$1,700$2,1005$1,7000CTCThe centrifuge should be retained for year(s) before abandonment. (Round to the nearest whole number. Type O if the centrifuge should be abandoned immediately)

When a company or firm thinks about whether a project is worth the costs that will be incurred in…

high-speed commercial centrifuge has the following net cash flows and abandonment values over its useful ife. The fm's bandoned if its current MV is $8.500 and it won't be used for more than five years. Click the icon Annual revenues less expenses Abandonment value of machine" $1,700 $6,200 2 $1,700 5.300 "Estimated MV the interest and annuity table for discrete compounding when MARR-8% per year. GUD End of Year 3 4 $1,700 $1,700 $1,700 $4,100 $2,100 0 Centrifuge should be retained for years) before abandonment (Round to the nearest whole number. Type O if the centrifuge should be abandoned immediately)

high-speed commercial centrifuge has the following net cash flows and abandonment values over its useful ife. The fm's bandoned if its current MV is $8.500 and it won't be used for more than five years. Click the icon Annual revenues less expenses Abandonment value of machine" $1,700 $6,200 2 $1,700 5.300 "Estimated MV the interest and annuity table for discrete compounding when MARR-8% per year. GUD End of Year 3 4 $1,700 $1,700 $1,700 $4,100 $2,100 0 Centrifuge should be retained for years) before abandonment (Round to the nearest whole number. Type O if the centrifuge should be abandoned immediately)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 2E

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