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Machine X has an initial cost of $10,000 and annual maintenance of $500 per year. It has a useful life of four years and no
Machine X has an initial cost of $10,000 and annual maintenance of $500 per year. It has a useful life of four years and no salvage value at the end of that time. Machine Y costs $20,000 initially and has no maintenance costs during the first year. Maintenance is $100 at the end of the second year and increases by $100 per year thereafter. Machine Y has a useful life of eight years and an anticipated salvage of $5000 at the end of its useful life. If the MARR is 8%, which machine should be recommended? Use the present wroth method.
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