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A firm owns a pressure vessel that it is contemplating replacing. The old pressure vessel has annual operating and maintenance expenses of $60,000 per year

A firm owns a pressure vessel that it is contemplating replacing. The old pressure vessel has annual operating and maintenance expenses of $60,000 per year and it can be kept for five more years at which time it will have zero market value. It is believed it could be sold now for $30,000.

The new pressure vessel can be purchased for $120,000. The new pressure vessel will have a market value of $50,000 in fiv years and will have O&M cost of $30,000 per year. Using a before tax MARR of 20% per year, what is the EUAC of the old pressure vessel for a five year study period?

a.

$70,035

b.

$63,410

c.

$58,546

d.

$81,223

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