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An oil and gas company is trying to determine whether or not it should replace a fixture on one of its offshore oll wells. The
An oil and gas company is trying to determine whether or not it should replace a fixture on one of its offshore oll wells. The fixture would cost $63,000 and would generate annual savings of $24,000 for each of the next 4 years; at the end of 4 years, the fixture would have negligible salvage value. The fixture will be depreciated using MARS as 5-year property, the company's after-tax MARR is 7%, and the tax rate is 27%. Compute the Future Worth and use this to determine whether or not the company should replace the fixture
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