A specialty concrete mixer used in construction was purchased for $300,000 7 years ago. Its annualO&Mcosts are $105,000. At the end of the 8-year planning horizon, the mixer will have a salvage value of $5,000. If the mixer is replaced, a new mixer will require an initial investment of $375,000. At the end of the 8-year planning horizon, it will have a salvage value of $45,000. Its annualO&Mcost will be only $40,000 due to newer technology. Analyze this using anEUACmeasure and aMARRof 15% to see if the concrete mixer should be replaced if the old mixer is sold for its market value of $65,000.

Part A

Use the cash flow approach (insiders viewpoint approach).

Show the EUAC values used to make your decision: -Existing concrete mixer: $_____________ (answer) -New concrete mixer: $_______________ (answer) Replace concrete mixer? Yes or No?

Part B

Use the opportunity cost approach (outsiders viewpoint approach).

Show the EUAC values used to make your decision: -Existing concrete mixer: $__________(answer) -New concrete mixer: $_________ (answer) Replace concrete mixer? Yes or NO?YesNo Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is 3%.