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Clear Water Company has a down-hole well auger that was purchased 3 years ago for $30.000. OSM costs are $11,000 per year. Alternative A is

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Clear Water Company has a down-hole well auger that was purchased 3 years ago for $30.000. OSM costs are $11,000 per year. Alternative A is to keep the existing auger, which has a current market value of $12,500. It will have a $0 salvage value after 7 more years. Alternative Bis to buy a new auger that will cost $57,000 and will have a $15,500 salvage value after 7 years.OSM costs are $4,000 for the new auger. Clear Water can trade in the existing auger on the new one for $15.000. Alternative C is to trade in the existing auger on a treated auger" that requires vastly less OGM cost at only $3,250 per year. It costs $58,000, and the trade-in allowance for the existing auger is $19.000. The treated auger" will have an $18,000 salvage value after 7 years. Alternative Dis to sell the existing auger on the open market and to contract with a current competitor to use their equipment and services to perform the drilling that would normally be done with the existing auger. The competitor requires a beginning-of-year retainer payment of $11,000. End-of-year O&M cost would be $7.000. MARR is 15%, and the planning horizon is 7 years. Click here to access the TVM Factor Table Calculator Parta Clearly show the cash flow profile for each alternative using a cash flow approach (insider's viewpoint approach). EOY Alternative A Alternative B Alternative Alternative D 0 $ $ $ $ 1 $ $ $ $ 2 $ $ $ $ $ $ $ $ 4 $ $ $ $ 5 $ $ $ 5 $ $

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