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2) The present worth of the after-tax cash flows of an existing machine (defender) with three-year remaining useful life
Posted: Sun May 29, 2022 6:48 pm
by answerhappygod
- 2 The Present Worth Of The After Tax Cash Flows Of An Existing Machine Defender With Three Year Remaining Useful Life 1 (90.13 KiB) Viewed 15 times
2) The present worth of the after-tax cash flows of an existing machine (defender) with three-year remaining useful life and a replacement alternative (challenger) with a five-year useful life are given in the table below. The after-tax MARR is 12% per year for the
company that is considering the replacement. Please answer the following
questions based on appropriate quantitative calculations. Present Worth of After-Tax Cash Flows Year Defender Challenger 1 -$14,020 -$18,630 2 -28,100 -34,575 3 -43,075 -48,130 4 -65,320 5 -77,910 (a) What is the economic life and minimum equivalent uniform annual cost for each asset? (b) When should the existing machine be replaced with the challenger? Why so? (c) What assumption(s) have you made in answering part (b) of the
question?