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5. CVN's vice president for production purchased a machine 10 years ago for $100,000 and expects to have the salvage value and operating costs as

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5. CVN's vice president for production purchased a machine 10 years ago for $100,000 and expects to have the salvage value and operating costs as shown below. CVN was offered $16,000 to sell the machine now. A replacement machine will cost $250,000 and will have a salvage value of $20,000 and a life of 10 years. annual operating cost is expected to be $62,000. At an interest rate of 15% per year, find the ESL and determine how many more years CVN should retain this machine before replacement. (20 points) (Additional) Year Salvage value, $ Annual operating cost, $ 1 12000 100,000 2 8000 106,000 3 2000 120,000

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