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Please use a sensitivity analysis to solve this! thanks! 1) Your old pump has annual operating costs of $40,000, which you consider excessive. You are
Please use a sensitivity analysis to solve this! thanks!
1) Your old pump has annual operating costs of $40,000, which you consider excessive. You are thinking about buying a new pump, which would have operating costs of only $20,000 per year. Either option could last for three years, with no salvage value. Your minimum acceptable rate of return is 12% per year. Determine whether the decision of whether to replace your old pump is sensitive to the cost of the new pump, if that cost can range from $30,000 to $50,000Step by Step Solution
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