If money is worth 10% to the company, should the old machine be replaced or not and how much is the difference of the annual cost for both alternatives. Use Annual Cost Method
Diamse Engineering Corporation bought 72 inches vertical boring machine ten years ago for 90,000 with an expected life of 20 years. The new management anticipated now that the machine will serve well for another 6 years only and purchase a new machine at 120,000 with an expected life of 16 years. The old machine is
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