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The initial cost of an air compressor is $5,000. Operation and maintenance costs tend to increase year by year throughout its life as shown below.

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The initial cost of an air compressor is $5,000. Operation and maintenance costs tend to increase year by year throughout its life as shown below. The salvage value is $3, 600 after 1 year, and it decreases by $400 each year. With the required rate of return at 15%: Determine the most economical year to replace the compressor

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