A machine was bought three years ago for $200,000 with the expected life of 8 years and a salvage value of $20,000. It now can be sold for $100,000. The annual operating cost for this machine over the next five years will be $30,000. A new machine can be purchased for $250,000, a salvage value of $20,000, expected life-of 10 years, and an annual operating cost of $20,000. Should we replace the old machine? MARR= 10%

A machine was bought three years ago for $200,000 with the expected life of 8 years and a salvage value of $20,000. It now can be sold for $100,000. The annual operating cost for this machine over the next five years will be $30,000. A new machine can be purchased for $250,000, a salvage value of $20,000, expected life-of 10 years, and an annual operating cost of $20,000. Should we replace the old machine? MARR= 10%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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