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An asset purchased several years ago can be sold today for OMR 15,000. Operating expenses in the past have been OMR 10,000 per year,
An asset purchased several years ago can be sold today for OMR 15,000. Operating expenses in the past have been OMR 10,000 per year, but these are estimated to increase in the future by OMR 1,500 per year each year. It is estimated that the market value of the old asset decrease by OMR 1,000 per year over the next 5 years. If the MARR used by the company is 15%: A. Calculate the total marginal cost of ownership of this old asset (that is the defender) for each of the next 5 years. B. If the minimum EUAC for a new asset (a challenger) is given in the table below, use the suitable replacement analysis technique to determine when, if at all, a replacement decision should be made.
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