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A company must choose between two new semiconductor fabrication equipment to replace the existing system to support its ongoing operations. System A costs $220,000 and
A company must choose between two new semiconductor fabrication equipment to replace the existing system to support its ongoing operations. System A costs $220,000 and requires annual maintenance costs of $9,500 during its six-year life. System B costs $170,000 and requires annual maintenance cost of $15,000 during its eight-year life. The appropriate discount rate is 6 percent. Which system should the firm choose? (5 marks) Use the project analysis technique for mutually exclusive projects with unequal lives.
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