company A is able to sell one of its two milling machines. Both machines perform the same function but differ in age. The newer machine could be sold today for $66,500.

Company A is able to sell one of its two milling machines. Both machines perform the same function but differ in age. The newer machine could be sold today for $66,500. Its operating costs are $22,200 a year, but in five years the machine will require a $18,900 overhaul. Thereafter operating costs will be $31,100 until the machine is finally sold in year 10 for $6,650 The older machine could be sold today for $26,100. If it is kept, it will need an immediate $25,500 overhaul. Thereafter operating costs will be $34,000 a year until the machine is inally sold in year 5 for 6 650. Both machines are fully depreciated for tax purposes. The company pays tax at 35% Cash ows ha e been forecas ed in real te t the real cost of a rat s new at is the equivalent annual costs for selling the new machine? 13,974 85 O 13,508.80 70,136 55 45.283 58