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6.2FedEx Office is considering replacing a large format printer at one of their locations. The purchase cost of a new one will be $24,745 and
6.2FedEx Office is considering replacing a large format printer at one of their locations. The purchase cost of a new one will be $24,745 and will have lower maintenance costs per year compared with the older one. The current machine can be sold for $6,200 now. The salvage value and maintenance costs per year are listed below for both alternatives. Assume a 7-year useful life and the MARR is 8% Old Machine New Machine EOY Salvage MaintenanceSalvage Maintenance Costs Value $6,200 $5,314 $4,429 $3,543 $2,657 $1,771 $886 $0 Costs $620 $826 $1,102 $1,469 $1,958 $2,609 $3,478 Value $24,745 $22,271 $20,043 $18,039 $16,235 $14,612 $13,151 $11,835 $333 $416 $520 $650 $813 $1,016 $1,270 2 4 7 a) Calculate the Marginal Cost of the old machine (Defender). Which replacement analysis technique will you use and why? [1 point + 1 point] b) Find the EUACs of Capital Recovery for the new machine (Challenger) [2 points] c) Find the EUACs of Maintenance Cost for the new machine (Challenger) [2 points] d) Find the Total EUACs of the two alternatives. [2 points] e) When (Economic Life) should the old car be replaced? Why? [1+1 point]
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