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 10% per year. Determine the replacement value. Market Value, $ Annual Cost, $ per Year Salvage Value Life, Years The replacement value is $-27078.38452 Machine X ? -56,000 12,500 3 Machine Y 83,000 -40,000 for year 1,increasing by 2000 per year thereafter. 17,000 5
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 10% per year. Determine the replacement value. Market Value, $ Annual Cost, $ per Year Salvage Value Life, Years The replacement value is $-27078.38452 Machine X ? -56,000 12,500 3 Machine Y 83,000 -40,000 for year 1,increasing by 2000 per year thereafter. 17,000 5
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 10% per year. Determine the replacement value.
Market Value, $
Annual Cost, $ per Year
Salvage Value
Life, Years
The replacement value is $-27078.38452
Machine X
?
-56,000
12,500
3
Machine Y
83,000
-40,000 for year 1,increasing by 2000 per
year thereafter.
17,000
5
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