Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 1 The company Sul purchased a machine at a cost of $ 460,000 in 2014. Today (2020) it has two options: invest $ 40,000

Question 1 The company Sul purchased a machine at a cost of $ 460,000 in 2014. Today (2020) it has two options: invest $ 40,000 in the adequacy of the machine and operate for another 6 years at the end of which its residual value will be null or replace it, today, by a more modern rented machine. If it is replaced, the used machine can be sold for $ 200,000. Consider the information below:

item

keep old machine

rent new machine

Labor ($/year)

300.000

250.000

Material Cost ($/year)

250.000

100.000

maintenance cost ($/year)

8.000

0

Rent ($/year)

0

260.000

Considering a TMA = 1.5% per month (consider monthly capitalization) What is the best option for the company?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets And Institutions A Modern Perspective

Authors: Anthony Saunders, Marcia Millon Cornett, Marcia Cornett

2nd Edition

007294109X, 978-0072941098

More Books

Students also viewed these Finance questions

Question

Solve the following 1,4 3 2TT 5x- 1+ (15 x) dx 5X

Answered: 1 week ago