Old Machine Repair Salvage n Value Value O&M CR(10%) OC(10%) AEC(109% 0 $1,200 $5,000 $4,000 $2,000 $2,420 $2,000 $4,420 $3,000 $3,500 $2,144 $2,714 $4,858 W $2,000 $5,000 $1,889 $3,405 $5,294 $1,000 $6,500 $1,740 $4,072 $5,812 $0 $8,000 $1,636 $4,715 $6,351 New Machine Market n Value O&M CR(10%) OC(10%) AEC(10%) 0 $6,000 1 $5,100 $2,000 $5,900 $2,000 $7,900 2 $4,335 $2,800 $3,698 $2,381 $6,079 3 $3,685 $3,600 $2,908 $2,749 $5,657 4 $3,132 $4,400 $2,480 $3,105 $5,585 5 $2,662 $5,200 $2,202 $3,448 $5,650 Concepts to include: . How to decide if replacement takes places now. . How to use marginal analysis to decide when to replace