Acme purchased a bending machine two years go for old machine has annual operating and ma of year three. The pending machine can be it will have $2592 MV. It is believed that $21. sold now, ars go for $45,000 that it is considering replacing The maintenance expenses of $10,000 per year begin at the end for three more years, at which time be obtained for the old machine if it were machine, with the same functionality as the current machine, for market value of the new machine is estimated to be $19,200. Annual costs will be $8,000 per year. Depreciation deductions have followed very period) method. Using a before-tax MARR of 20% per year Acme can purchase a new machine, with the sam $100,000. In three years, the market value of t operating and maintenance costs will be $8,000 per the MACRS (GDS, 5-year recovery period) method. Using a before-la. and a study period of three years, A. Calculate the market value for each machine for the given study period. B. Should the old machine be replaced, C. How long should the challenger machine be retained in service? D. When should the defender XYZ be abandoned, E. Assuming an effective income tax rate of 45% compute the after-tax investment value of the bending machine if it's kept at the after-tax MARR rate. What is the Economic value added (EVA) if the machine is kept at the after-tax MARR rate? F. What is the actual dollar amount of the challenger at the end of three years, the real IR to the lender, and the real dollar amount equivalent in purchasing power to the actual-dollar amount at the end of the third year? Assume that the base period is now (b=0) and that the general price inflation rate is 5% per year. Acme purchased a bending machine two years go for old machine has annual operating and ma of year three. The pending machine can be it will have $2592 MV. It is believed that $21. sold now, ars go for $45,000 that it is considering replacing The maintenance expenses of $10,000 per year begin at the end for three more years, at which time be obtained for the old machine if it were machine, with the same functionality as the current machine, for market value of the new machine is estimated to be $19,200. Annual costs will be $8,000 per year. Depreciation deductions have followed very period) method. Using a before-tax MARR of 20% per year Acme can purchase a new machine, with the sam $100,000. In three years, the market value of t operating and maintenance costs will be $8,000 per the MACRS (GDS, 5-year recovery period) method. Using a before-la. and a study period of three years, A. Calculate the market value for each machine for the given study period. B. Should the old machine be replaced, C. How long should the challenger machine be retained in service? D. When should the defender XYZ be abandoned, E. Assuming an effective income tax rate of 45% compute the after-tax investment value of the bending machine if it's kept at the after-tax MARR rate. What is the Economic value added (EVA) if the machine is kept at the after-tax MARR rate? F. What is the actual dollar amount of the challenger at the end of three years, the real IR to the lender, and the real dollar amount equivalent in purchasing power to the actual-dollar amount at the end of the third year? Assume that the base period is now (b=0) and that the general price inflation rate is 5% per year
