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Hayden Inc. has a number of copiers that were bought four years ago for $39,000. Currently maintenance costs $3,900 a year, but the machines have
Hayden Inc. has a number of copiers that were bought four years ago for $39,000. Currently maintenance costs $3,900 a year, but the machines have a current resale value of $9,900, but at the end of year 2 , ther value will have fallen to $5,400. By the end of year 6 . the machines will be valueless and would be scrapped. Haytien is considering renlacinn the coniers wath new machines that would do essentially the same job. These machines cost $344,000, and the company can take out an eight-year maintenance contract for $1,900 a year. The machines would have no value by the end of the elghtyears and would be scrapped. Both machines are depreciated using seven-year straight-line depreciation, and the tax rate is 35%. Assume for simplicity that the inflation rate is zero. The real cost of capital is 7% a. Calculate the equivalentannual cost, if the coplers are: (i) replaced now, (1) replaced two years from now, or (iil) replaced spx years from now. (Do not round intermediate calculations, Enter your answers as o positive volue rounded to 2 decimal places.)
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