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Problem 7 ( 1 0 points ) . Last year Machine A was purchased for $ 1 5 , 0 0 0 . Machine A

Problem 7(10 points). Last year Machine A was purchased for $15,000. Machine A has a useful life of five years and four years remain. However, Machine A has not performed as expected and annual operating costs have been $9000 per year. An alternative, Machine B can be purchased for $25,000 and is expected to have an annual operating cost of $2500 per year. The expected useful life of Machine B is five years and the salvage of both machines is negligible. Assuming a minimum rate of return of 6%, when should you purchase Machine B to replace Machine A?
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