ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Chapter 13, Problem 40P
To determine

To find: Whether the existing asset should be replaced or not.

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The cost of a replacement packaging machine if $95,000. The machine is anticipated to reduce the packaging costs by $20 per parcel. The company expects to send out 25,000 parcels per year. The salvage values of the machine is anticipated to be $23,000 at the end of 10 years. What is the present worth of the machine if the after-tax MARR is 10%, the CCA rate is 20%, and the tax rate is 40%? [Enter your response in $. Round to the nearest full dollar]
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