Question
The Georgetown office copying was purchased 3 years ago by your electrical engineering firm. It may be sold at present for $225 on the open
The Georgetown office copying was purchased 3 years ago by your electrical engineering firm. It may be sold at present for $225 on the open market. Its resale value at any time in the future is estimated as $125. Operating costs for material, labor, and maintenance will remain at $4.100 per year for the next 4 years, the study period. Office Leasing, a reliable company, will furnish a similar machine for $1.000 per year with a guaranteed operating expense of $3.200 annually over the next 4 years. Should you replace the present machine with the leased one if your MARR is 15 percent and tax and inflation effects are disregarded?
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