Question
AAAA corp. is considering replacing a machine. These are the data for both the used and new machine. Used machine: the machine was purchased for
AAAA corp. is considering replacing a machine. These are the data for both the used and new machine. Used machine: the machine was purchased for $15,306 two years ago, the current salvage value is $11,373 and is expected to have a scrap value of $5,723 whenever it is retired. This used machine still has 5 years left of service. From now on, the operating and Maintenance costs are $2,097 for the first year and expected to increase by $1,776 thereafter. New Machine: machine costs $13,311 and is expected to have a scrap value of $9,934 whenever it is retired. Operating and Maintenance costs are $1,376 for the first year and expected to increase by $1,550 thereafter. The service life of this machine is 4 years. If the MARR is 11%, determine the minimum equivalent uniform annual cost associated with the optimal economic life of the machine that offers the lowest EUAC. round your answer to two decimal places
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