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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 $25,000 for installation and will have an estimated economic life of 12 years and a $2,000 MV at that time. It is estimated that annual expenses will average $11,000 per year. The defender has a present BV of $5,500 and a present MV of $4000. Data for the defender for the next three years are given below. Using a before-tax interest rate of 15% 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 S 1,000 - 1,250 - 1,500 Year $4,125 2,750 1,375 the Year $22,000 29,000 36,000 Click the icon to view the interest and annuity table for discrete compounding when i-15% 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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