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Replacement Analysis BTCF ( 1 5 ptos ) Machine A was purchased five years ago for $ 1 4 , 0 0 0 and had

Replacement Analysis BTCF (15 ptos)
Machine A was purchased five years ago for $14,000 and had an estimated market value of $1,000 at the end of its 10-year life. Annual operating costs are $1,500. The machine will perform satisfactorily for the next five years. A salesman for another company is offering machine B for $60,000 with a market value of $5,000 after 10 years. Annual operating costs will be $800. Machine A could be sold now for MVo =$9,000, and the MARR is 6% per year.
a. Using the outsider viewpoint, what is the annual worth AW of continuing to use Machine A?
b. Using the outsider viewpoint, what is the annual worth AW of buying Machine B?
c. Should Machine A be replaced with Machine B?
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