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The Ajax Corpoartion has an overhead crane that has an estimated remaining life of 8 years. The crane can be sold now for $ 8
The Ajax Corpoartion has an overhead crane that has an estimated remaining life of years. The crane can be sold now for $ comma If the crane is kept in service, it must be overhauled immidiately at a cost of $ comma Operating and maintenance costs will be $ comma per year after the crane is overhauled. The overhauled crane will have zero MV at the end of the year study period. A new crane will cost $ comma will last for years and will have a $ comma MV at that time. Operating and maintenance costs are $ comma per year for the new crane. The company uses a beforetax interest rate of per year in evaluating investment alternatives. Should the company replace the old crane?The Ajax Corpoartion has an overhead crane that has an estimated remaining life of years. The crane can be
sold now for $ If the crane is kept in service, it must be overhauled immidiately at a cost of $ Operating
and maintenance costs will be $ per year after the crane is overhauled. The overhauled crane will have zero
MV at the end of the year study period. A new crane will cost $ will last for years, and will have a
$ at that time. Operating and maintenance costs are $ per year for the new crane. The company
uses a beforetax interest rate of per year in evaluating investment alternatives. Should the company replace
the old crane?
Reference
The AW of the old crane is
The AW of the new crane is
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