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A company has 2 machines and one of them is broken. The company decides to buy a machine which has book value as $700K or
A company has 2 machines and one of them is broken. The company decides to buy a machine which has book value as $700K or not. If they decide not to buy, every year it costs them $174K. (Interest rate=10%) (Depreciation rate=15%). The calculation starts in year 0. Salvage value is $200K. Annual expense is $20K. Find the cost and breakeven point.
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