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Manufacturing equipment was purchased at a price of $1 million eight years ago, and production capacity of this machine is X. A company is considering
Manufacturing equipment was purchased at a price of $1 million eight years ago, and production capacity of this machine is X. A company is considering purchasing new equipment of the same design but production capacity is 1.33X. However, if it is purchased, apart from the equipment itself, an extra cost $2,000 has to be added for application. The cost index for this type of equipment was 162 eight years ago and is now 221. The applicable cost-capacity factor is 0.8. Estimate the total cost of purchasing the new machine?
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