The replacement value is $ (?).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject:- accounting
Transcribed Image Text:With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to
that of machine Y at an interest rate of 12% per year. Determine the replacement value.
Machine X
Machine
Market Value, $
Annual Cost, $ per Year
Salvage Value
Life, Years
The replacement value is $ (?).
?
-62,500
16,500
3
86,000
-40,000 for year 1,increasing by 2000 per year thereafter.
16,000
5
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