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Its largest water-jet cutter will have to be replaced some time before the end of four years. The old cutter is currently worth $49,000. Other
Its largest water-jet cutter will have to be replaced some time before the end of four years. The old cutter is currently worth $49,000. Other cost data for the current and replacement cutters can be found in the Tables 1 and 2 that follow. The minimum acceptable rate of return (MARR) is 16 percent. Analyze the economic life of the new cutter, and the equivalent annual cost for that life. When should the new cutter replace the old?
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