A new steel stirred tank reactor costs $8,000, plus $1,200 for installation. Currently, the company you...

 

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A new steel stirred tank reactor costs $8,000, plus $1,200 for installation. Currently, the company you work for has a stainless steel unit in the warehouse, and it could be used in this application. The old reactor was used for 4 years but will last the same length of time as new steel one, its cost when purchased was $16,000. Cost of installing the old reactor would be $2,500. The old reactor has a used market value of $6,800. a) Determine the best alternative. b) You are not quite sure of the market value of $6,800 for the old reactor. What value would it need to have for you to be indifferent to the decision? A new steel stirred tank reactor costs $8,000, plus $1,200 for installation. Currently, the company you work for has a stainless steel unit in the warehouse, and it could be used in this application. The old reactor was used for 4 years but will last the same length of time as new steel one, its cost when purchased was $16,000. Cost of installing the old reactor would be $2,500. The old reactor has a used market value of $6,800. a) Determine the best alternative. b) You are not quite sure of the market value of $6,800 for the old reactor. What value would it need to have for you to be indifferent to the decision?

Answer rating: 100% (QA)

a To determine the best alternative lets compare the total costs of purchasing and installing the ne... View the full answer