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

$35 comma 00035,000

for installation and will have an estimated economic life of

1111

years and a

$2 comma 0002,000

MV at that time. It is estimated that annual expenses will average

$11 comma 00011,000

per year. The defender has a present BV of

$5 comma 5005,500

and a present MV of

$35003500.

Data for the defender for the next three years are given below. Using a before-tax interest rate of

1010%

per year, make a comparison to determine whether it is economical to make the replacement now.

Year	MV at End of Year	BV at End of Year	Expenses during the Year
1	$2 comma 5002,500	$4 comma 1254,125	$20 comma 00020,000
2	2 comma 2502,250	2 comma 7502,750	27 comma 00027,000
3	2 comma 0002,000	1 comma 3751,375	34 comma 00034,000

Click the icon to view the interest and annuity table for discrete compounding when

iequals=1010%

per year.

Fill in the table for the EUAC values for the defender for years 1-3. (Round to the nearest dollar.)

Year	EUAC
1	$nothing
2	$nothing
3	$nothing

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 S35,000 for installation and will have an estimated economic life of 11 years and a $2,000 MV at that time. It is estimated that annual expenses will average S11,000 per year. The defender has a present BV of S5,500 and a present MV of $3500. Data for the defender for the next three years are given below. Using a before-tax interest rate of 10% per year, make a comparison to determine whether it is economical to make the replacement now. Year MV at End of Year $2,500 2,250 2,000 BV at End of Expenses during Year $4,125 2.750 1,375 the Year $20,000 27,000 34,000 Click the icon to view the interest and annuity table for discrete compounding when i: 10% per year Fill in the table for the EUAC values for the defender for years 1-3. (Round to the nearest dollar.) Year EUAC 1 yrAP 02158|64467|0 8 06253-9573 07016 15432 10000-00000-0 0 087 2 Ce OG RT 02158|64467|0 8 06253-9573 07016-2087 04321-11000-00 10000-00000-0 0 OG - 15998-34906-17 95690|58 03869-56 97417-38371-48 na-d 01233-44556-6 6 954-2 3 00001-62 nnA|0 0 0 1 557597-1. oG -1 2 3 4 67913581 111-12 14309-52515-5 6 3645-08 1628-51 na-d 96130 5 ehF.v P 9 8 7 6 65544333 00000-00000-0 0 00015|67697|14 0-18373-3 8 4459-53 9135-8 I 001 N1 2 3 4 56789 10 11 12