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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 $32,000 for installation and will have an estimated economic life of 13 years and a $1,800 MV at that time. It is estimated that annual expenses will average $14,000 per year. The defender has a present BV of $6,500 and a present MV of $5000. 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 Year MV at End of BV at End of Expenses during Year $4,000 3,500 3,000 Year $4,875 3,250 1,625 the Year $20,000 27,000 34,000 Click the icon to view the interest and annuity table for discrete compounding when ,-12% per year 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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