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PLease answer this question with shwoing all steps(Manually with out using Excel) A company first purchased a CNC machine for $100K and has used it
PLease answer this question with shwoing all steps(Manually with out using Excel)
A company first purchased a CNC machine for $100K and has used it for 3 years. It's economic life then was estimated at 6 years with a residual value of $10K. Another vendor has offered a replacement that will have lower O&M and last 10 years. The new vendor has offered to buy your present CNC machine for $50K (it shown in the company's books as having a depreciated book value of $60K). His price for the new machine is $120K. Your O&M cost for your current machine is $5K/year. The claims his CNC machine will only cost $3K/year and can be sold at the end of 10 years for $10K. Should you replace your current machine? MARR is 10%Step by Step Solution
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