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1) A high-speed electronic assembly machine was purchased two years ago for $50,000. The machine can be sold today for $
Posted: Sun May 29, 2022 6:47 pm
by answerhappygod
- 1 A High Speed Electronic Assembly Machine Was Purchased Two Years Ago For 50 000 The Machine Can Be Sold Today For 1 (85.1 KiB) Viewed 16 times
1) A high-speed electronic assembly machine was purchased two years ago for $50,000. The machine can be sold today for $25,000 and replaced by a newer model that has a purchase price of $42,500; or it can be kept in service for a maximum of one more year. If purchased, the new assembly machine has a useful life of not more than two years. The projected resale values and operating and maintenance costs for the two machines are shown in the table below on a year-by-tear basis. If the before tax MARR is 15% for the firm that is considering the replacement, when should the old machine be replaced with the new one? Challenger Defender Year O & M Costs Market Value O & M Costs Market Value $42,500 0 $25,000 1 31,000 $10,000 $17,000 $14,000 2 25,000 12,500