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Show work please clear work. Thanks Diagram if necessary. A municipality 4 years ago purchased a pump for its sewage treatment plant at $6,000. are
Show work please clear work. Thanks Diagram if necessary. A municipality 4 years ago purchased a pump for its sewage treatment plant at $6,000. are expected to continue. This pump is expected to continue to operate satisfactorily for 6 additional years, at which tie it may be expected to have negligible salvage value. The municipality has an opportunity to purchase a new pump for $8,500. The new pump is estimated to have a life of 6 years negligible salvage value at the end of its life, and an annual operating cost of $1,400. If the new pump is purchased, the old pump will be sold for $1,600. The interest rate is 12%, with no knowledge of future replacements and a 6 year study period, what option should be selected? The pump had annual operating costs of $3,200 and these
Show work please clear work.
Thanks
Diagram if necessary.
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