Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A present asset (defender) has a current market value of $88,000. Estimated market values at the end of the next three years are MV, =
A present asset (defender) has a current market value of $88,000. Estimated market values at the end of the next three years are MV, = $75,000, MV2 = $60,000, MV; = $36,000. The corresponding annual expenses are $16,700, $17,500, and $18,300 for years 1, 2 and 3, respectively. The before-tax MARR is 11% per year. The best challenger has an economic life of 5 years and its associated EUAC is $41,295. Based on this information and a before-tax analysis, what are the marginal costs of the defender each year and when should you plan to replace the defender with the challenger? Click the icon to view the interest and annuity table for discrete compounding when MARR = 11% per year. Fill the table below. (Round to the nearest dollar.) Year Marginal Costs of the Defender 1 W N The replacement should be made - X O A. after 2 years More Info O B. now O C. after 3 years Discrete Compounding; /= 11% O D. after 1 years Single Payment Uniform Series Compound Compound Capital Amount Present Amount Present Sinking Fund Recovery Factor Worth Factor Factor Worth Factor Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Given P Given F Given A Given A Given F Given P F/P P/F F/A P/A A/F A/P 1.1100 0.9009 1.0000 0.9009 1.0000 1.1100 1.2321 0.8116 2.1100 1.7125 0.4739 0.5839 1.3676 0.7312 3.3421 2.4437 0.2992 0.4092 1.5181 0.6587 4.7097 3.1024 0.2123 0.3223 1.6851 0.5935 6.2278 3.6959 0.1606 0.2706 SONGDAWN 1.8704 0.5346 7.9129 4.2305 0.1264 0.2364 2.0762 0.4817 9.7833 4.7122 0.1022 0.2122 2.3045 0.4339 11.8594 5.1461 0.0843 0.1943 2.5580 0.3909 14.1640 5.5370 0.0706 0.1806 2.8394 0.3522 16.7220 5.8892 0.0598 0.1698
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started