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The replacement of a planning machine is being considered by the Reardorn Furniture Company. (There is an indefinite future need for this type of machine.)
The replacement of a planning machine is being considered by the Reardorn Furniture Company. (There is an indefinite future need for this type of machine.) The best challenger will cost $29,000 for installation and will have an estimated economic life of 12 years and a $2,500MV at that time. It is estimated that annual expenses will average $11,000 per year. The defender has a present BV of $6,000 and a present MV of $4500. Data for the defender for the next three years are given below. Using a before-tax interest rate of 12% per year, make a comparison to determine whether it is economical to make the replacement now. Click the icon to view the interest and annuity table for discrete compounding when i=12% per year. Fill in the table for the EUAC values for the defender for years 1-3. (Round to the nearest dollar.) Discrete Compounding; i=12%
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