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9. A small company that manufactures vibration isolation platforms is trying to decide whether it should replace the current assembly system (D), which is rather

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9. A small company that manufactures vibration isolation platforms is trying to decide whether it should replace the current assembly system (D), which is rather labor intensive, at present or 1 year from now with a system that is more automated (C). Some components of the current system can be sold immediately for $9,500, but they will be worthless hereafter. The operating cost of the existing system is $161,000 per year. System C will cost $310,000with a $50,000 salvage value after 4 years. Its operating cost will be $65,000 per year. If you are told to do a replacement analysis using an interest rate of8% per year, which system would you recommend? System Market Value, $ AOC, S per Year Salvage Value, $ Life Years D 9,500 161,000 0 1 310,000 65,000 50,000

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