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kindly solve these problems A crashing machine that is a basic component of a metal recycling operation is wearing out faster than expected. The machine

kindly solve these problems

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A crashing machine that is a basic component of a metal recycling operation is wearing out faster than expected. The machine was purchased 2 years ago for $400,000. At that time, the buyer thought the machine would serve its needs for at least 5 years, at which time the machine would be sold to a smaller independent recycler for $30,000. Now, however, the company thinks the market value of the diminished machine is only $50,000. If it is kept, the machine's operating cost will be $37,000 per year for the next 2 years, after which it will be scrapped for $1000. If it is kept for only 1 year, the market value is estimated to be $10,000. Altema- tively, the company can of nice the process now for a fixed cost of $56,000 per year. At an interest rate of 10%% per year, should the company continue with the current machine or o arce the process? The data associated with operating and maintain- ing an asset are shown below. The company man- ager has already decided to keep the machine for I more year (ie., until the end of year 1), but you have been asked to determine the cost of keeping it more year after that. At an interest rate of 10% ber year, estimate the AW of keeping the machine from year I to year 2. Operating Cost. Year Market Value, $ $ per Year 30,000 -15,000 25,000 -15,000 14,000 -15,000 10,000 -15,000The annual worth values for a defender, which can be replaced with a similar used asset, and a chal. lenger are estimated. The defender should be re- placed: [a) Now (b) I year from now (c) 2 years from now () 3 years from now Number of AW Value, $ per Year Years Retained Defender Challenger -14,000 -21,000 OnC'EI- -16,900 -13,100 -17,000 -15 600 -18,000 - IT SOOThree years ago Chicago's O'Hare Airport purchased a new fire truck. Because of flight in- creases, new fire-fighting capacity is needed once again. An additional truck of the same capac- ity can be purchased now, or a double-capacity truck can replace the current fire truck. Esti- mates are presented below. Compare the options at 12%% per year using (a) a 12-year study period and (b) a 9-year study period. Presently Owned New Purchase Double Capacity Fintest P.S -151,000 (3 years ago) -175,000 -190 000 AOC, S -1,500 -1,500 -2,500 Market value, $ Salvage value, $ 10% ofP 12% of P 10% of P Life, years 12 12 12 Exlution\f\f

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