You own several copiers that are currently valued at $10,000, combined. Annual operating and maintenance costs for all copiers are estimated at $9,000 next year, increasing by 10 percent each year thereafter Salvage values decrease at a rate of 20 percent per year. You are considering replacing your existing copiers with new ones that have a suggested retail price of $26,000. Operating and maintenance costs for the new equipment will be $7,000 over the first year, increasing by 10 percent each year thereafter. The salvage value of the new equipment is well approximated by a 20 percent drop from the suggested retail price per year. Furthermore, you can get a trade-in allowance of $13,000 for your equipment if you purchase the new equipment at its suggested retail price. Your MARR is 9 percent. Should you replace your existing equipment now? E Click the icon to view the table of compound interest factors for discrete compounding periods when i = 9%. The economic life of the existing equipment is year(s) with a total EAC of $ This is a V total EAC than the new equipment, which has an economic life of year(s) and total EAC of $ You replace your existing equipment now. (Round to the nearest whole number as needed.)

You own several copiers that are currently valued at $10,000, combined. Annual operating and maintenance costs for all copiers are estimated at $9,000 next year, increasing by 10 percent each year thereafter Salvage values decrease at a rate of 20 percent per year. You are considering replacing your existing copiers with new ones that have a suggested retail price of $26,000. Operating and maintenance costs for the new equipment will be $7,000 over the first year, increasing by 10 percent each year thereafter. The salvage value of the new equipment is well approximated by a 20 percent drop from the suggested retail price per year. Furthermore, you can get a trade-in allowance of $13,000 for your equipment if you purchase the new equipment at its suggested retail price. Your MARR is 9 percent. Should you replace your existing equipment now? E Click the icon to view the table of compound interest factors for discrete compounding periods when i = 9%. The economic life of the existing equipment is year(s) with a total EAC of $ This is a V total EAC than the new equipment, which has an economic life of year(s) and total EAC of $ You replace your existing equipment now. (Round to the nearest whole number as needed.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

You own several copiers that are currently valued at $10,000, combined. Annual operating and maintenance costs for all copiers are estimated at $9,000 next year, increasing by 10 percent each year thereafter.
Salvage values decrease at a rate of 20 percent per year. You are considering replacing your existing copiers with new ones that have a suggested retail price of $26,000. Operating and maintenance costs for
the new equipment will be $7,000 over the first year, increasing by 10 percent each year thereafter. The salvage value of the new equipment is well approximated by a 20 percent drop from the suggested retail
price per year. Furthermore, you can get a trade-in allowance of $13,000 for your equipment if you purchase the new equipment at its suggested retail price. Your MARR is 9 percent. Should you replace your
existing equipment now?
E Click the icon to view the table of compound interest factors for discrete compounding periods when i= 9%.
The economic life of the existing equipment is year(s) with a total EAC of $. This is a
total EAC than the new equipment, which has an economic life of year(s) and a total EAC of $. You
V replace your existing equipment now.
(Round to the nearest whole number as needed.)

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