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3. (25p.) A firm owns a machine that it is contemplating replacing. The old machine has annual operating and maintenance expenses of $30,000 per year

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3. (25p.) A firm owns a machine that it is contemplating replacing. The old machine has annual operating and maintenance expenses of $30,000 per year and it can be kept for eight more years, at which time it will have a market value of $7,000. It is believed that $10,000 could be obtained for the old machine if it were sold now. A new machine can be purchased for $110,000. The new machine will have a market value of $50,000 in seven years and will have annual operating and maintenance expenses of $10,000 per year. Using a before-tax MARR of 10% per year, determine whether or not the old machine should be replaced

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