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A company bought a machine three years ago for $80,000. In the past, annual operating costs have been $21,000 per year but they are expected
A company bought a machine three years ago for $80,000. In the past, annual operating costs have been $21,000 per year but they are expected to increase. Future operating and maintenance costs and market values of the machine are shown below (all values are in thousands of dollars). If the machine is Class 43 (30% CCA rate), the tax rate is 40% and the MARR is 10%, determine the economic service life of the truck. (Assume the asset class continues, the machine is sold at the beginning of year N + 1 and additional assets are added to the class in the year of sale). Suppose the company is considering the purchase of a new machine. The new machine's annual equivalent costs (at a 10% interest rate and in thousands of dollars) are as follows for various periods of time. Determine when the old machine should be replaced
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