The replacement of a laser cutting machine is being considered. The best available machine on market has an estimated economic life of 12 years with an equivalent annual worth of S-24,800. The current used machine, which was bought six years ago for $48.000, has a present market value of $4,000 with the following data for the next three years: OC Estim ated Market Value Year S per Year at End of Year, S 20,000 3,000 25,000 2,500 30,000 2,000 Select when to replace the machine, using Economic Service Life method at an interest rate of 4% per year. O a) Replace now O b) Replace in year one O c) Replace in year two O d) Replace in year three
The replacement of a laser cutting machine is being considered. The best available machine on market has an estimated economic life of 12 years with an equivalent annual worth of S-24,800. The current used machine, which was bought six years ago for $48.000, has a present market value of $4,000 with the following data for the next three years: OC Estim ated Market Value Year S per Year at End of Year, S 20,000 3,000 25,000 2,500 30,000 2,000 Select when to replace the machine, using Economic Service Life method at an interest rate of 4% per year. O a) Replace now O b) Replace in year one O c) Replace in year two O d) Replace in year three
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 2E
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