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Machine A was purchased three years ago for $35,000 and had an estimated MV of $3, 500 at the end of its 10-year life. Annual

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Machine A was purchased three years ago for $35,000 and had an estimated MV of $3, 500 at the end of its 10-year life. Annual operating costs are $3,000. The machine will perform satisfactorily for the next seven years. A salesperson for another company is offering Machine B for $42,000 with an MV of $7,000 after 10 years. Annual operating costs will be $2, 400. Machine A could be sold now for $27,000, and MARR is 15% per year. Compare the before-tax equivalent uniform annual cost, EUAC, of the defender (keeping Machine A) to the challenger (buying Machine B). To answer this problem, calculate the value of the difference in a costs: EUAC (challenger) - EUAC(defender) = EUAC(Machine B) - EUAC(Machine A). (Enter your answer as a number without the dollar $ sign.)

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