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A job can be done with Machine A that costs $12,500 and has annual end-of-year maintenance cost of $5,000. The salvage value of this machine
A job can be done with Machine A that costs $12,500 and has annual end-of-year maintenance cost of $5,000. The salvage value of this machine after 3 years is $2000. Alternatively, the job can be done with Machine B, which costs $15,000 and has end-of-year maintenance cost of $4,000, and a salvage value of $1500 at the end of 4 years. Use annual worth analysis to the define the best alternative. The interest rate is 6%.
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