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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.)

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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 best challenger will cost $30,000 for installation and will have an estimated economic life of 11 years and a $2,500 MV at that time. It is estimated that annual expenses will average $15,500 per year. The defender has a present BV of $5,500 and a present MV of $3000. Data for the defender for the next three years are given below. Using a before-tax interest rate of 18% per year, make a comparison to determine whether it is economical to make the replacement noww. Year MV at End of BV at End of Expenses during Year $2,000 1,750 1,500 Year $4,125 2,750 1,375 the Year $18,000 25,000 32,000 2 Click the icon to view the interest and annuity table for discrete compounding when i#18% per Fill in the table for the EUAC values for the defender for years 1-3. (Round to the nearest dollar.) Year EUAC

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