Blooper Industries must replace its magnoosium purification system. Quick & Dirty Systems sells a relatively cheap purif
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Blooper Industries must replace its magnoosium purification system. Quick & Dirty Systems sells a relatively cheap purif
Blooper Industries must replace its magnoosium purificationsystem. Quick & Dirty Systems sells a relatively cheappurification system for $12 million. The system will last 4 years.Do-It-Right sells a sturdier but more expensive system for $20million; it will last for 8 years. Both systems entail $2 millionin operating costs; both will be depreciated straight-line to afinal value of zero over their useful lives; neither will have anysalvage value at the end of its life. The firm’s tax rate is 35%,and the discount rate is 12%. Either machine will be replaced atthe end of its life.