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Apricot Computers is considering replacing its material handling system and either purchasing or leasing a new system. The old system has an annual operating and
Apricot Computers is considering replacing its material handling system and either purchasing or leasing a new system. The old system has an annual operating and maintenance cost of $33,000, a remaining life of 8 years, and an estimated salvage value of $5,100 at that time. A new system can be purchased for $269,000; it will be worth $21,000 in 8 years; and it will have annual operating and maintenance costs of $18,000/year. If the new system is purchased, the old system can be traded in for $19,000. Leasing a new system will cost $23,000/year, payable at the beginning of the year, plus operating costs of $8,500/year, payable at the end of the year. If the new system is leased, the old system will be sold for $8,800. MARR is 13%. Compare the annual worths of keeping the old system, buying a new system, and leasing a new system based upon a planning horizon of 8 years. Click here to access the TVM Factor Table Calculator For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, e.g. 52.75. The absolute cell tolerance is +1 Part a What is the EUAC of the best option using the cash flow approach? $ Apricot Computers is considering replacing its material handling system and either purchasing or leasing a new system. The old system has an annual operating and maintenance cost of $33,000, a remaining life of 8 years, and an estimated salvage value of $5,100 at that time. A new system can be purchased for $269,000; it will be worth $21,000 in 8 years; and it will have annual operating and maintenance costs of $18,000/year. If the new system is purchased, the old system can be traded in for $19,000. Leasing a new system will cost $23,000/year, payable at the beginning of the year, plus operating costs of $8,500/year, payable at the end of the year. If the new system is leased, the old system will be sold for $8,800. MARR is 13%. Compare the annual worths of keeping the old system, buying a new system, and leasing a new system based upon a planning horizon of 8 years. Click here to access the TVM Factor Table Calculator For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, e.g. 52.75. The absolute cell tolerance is +1 Part a What is the EUAC of the best option using the cash flow approach? $
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