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On January 1, 2021, X Company bought a machine for $42,000. It's now January 1, 2022, and management is disappointed that 2021 operating costs
On January 1, 2021, X Company bought a machine for $42,000. It's now January 1, 2022, and management is disappointed that 2021 operating costs with the machine were $32,000. Since they are expecting future operating costs to continue to be $32,000 a year, they are considering replacing the machine with a new one. Although the new machine will cost $45,000, operating costs with the new machine will decrease by $7,000 each year. Both machines will last for 4 more years. The current machine can be sold immediately for $8,000 but will have no salvage value at the end of 4 years. The new machine will have a salvage value of $5,000 at the end of 4 years Assuming a discount rate of 4%, what is the net present value of replacing the current machine with the new one? A: 5-7,315 B: 5-9,144 C: 5-11,430 D: $-14,287 : 5-17,859 F5-22,324 Sw Tries 0/99
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