The maintenance of a machine in a manufacturing plant currently costs a company $8,000 every year (paid at the end of each year) with the cost increasing by $1,000 each subsequent year. Because of this, the plant manager is considering replacing this machine with a newer one which would cost $20,000 to purchase today, and then $4,000/year increasing by $300 in each year to maintain (also paid at the end of the year). If the company's MARR is at 8% per year compounded annually, what would be the discounted payback period (in years) for this proposed investment? tn67
The maintenance of a machine in a manufacturing plant currently costs a company $8,000 every year (paid at the end of each year) with the cost increasing by $1,000 each subsequent year. Because of this, the plant manager is considering replacing this machine with a newer one which would cost $20,000 to purchase today, and then $4,000/year increasing by $300 in each year to maintain (also paid at the end of the year). If the company's MARR is at 8% per year compounded annually, what would be the discounted payback period (in years) for this proposed investment? tn67
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![The maintenance of a machine in a
manufacturing plant currently costs a
company $8,000 every year (paid at the end
of each year) with the cost increasing by
$1,000 each subsequent year. Because of this,
the plant manager is considering replacing
this machine with a newer one which would
cost $20,000 to purchase today, and then
$4,000/year increasing by $30Ó in each year
to maintain (also paid at the end of the year).
If the company's MARR is at 8% per year
compounded annually, what would be the
discounted payback period (in years) for this
proposed investment?
4
6.
7](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F300a0eec-5cb6-43fc-8c1e-c10ba0d3ad57%2Ffd8f0e1a-ec0f-4776-b516-608ccc9b30b5%2Frmwc1c_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The maintenance of a machine in a
manufacturing plant currently costs a
company $8,000 every year (paid at the end
of each year) with the cost increasing by
$1,000 each subsequent year. Because of this,
the plant manager is considering replacing
this machine with a newer one which would
cost $20,000 to purchase today, and then
$4,000/year increasing by $30Ó in each year
to maintain (also paid at the end of the year).
If the company's MARR is at 8% per year
compounded annually, what would be the
discounted payback period (in years) for this
proposed investment?
4
6.
7
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