Question
Equipment purchased 2 years ago by Newport Corporation to make pneumatic vibration isolators cost $90,000. It has a market value that can be described by
Equipment purchased 2 years ago by Newport Corporation to make pneumatic vibration isolators cost $90,000. It has a market value that can be described by the relation $90,000 $5233k, where k is the years from time of purchase. The operating cost for the first 5 years is $25,000 per year, after which it increases by $5,000 per year. The assets salvage value was originally estimated to be $9,000 after a predicted 10-year useful life. Determine the values of CR if a replacement study is done 5 years from now and it is assumed that the equipment will be kept a maximum of only one more year after that at an interest rate of %10 per year.
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