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A motor costs $20,000 for an estimated design life of 6 years. An auxiliary piece of equipment, though, can save $300 annually in operating the
A motor costs $20,000 for an estimated design life of 6 years. An auxiliary piece of equipment, though, can save $300 annually in operating the motor and extend its design life to 9 years. The motor can be salvaged for $5,000 in either case. What is the maximum justifiable cost of the auxiliary equipment if the interest rate is 8%?
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