Question
TRS uses cutting machines in its manufacturing processes and must decide whether to replace them every year or every two years. The machine costs
TRS uses cutting machines in its manufacturing processes and must decide whether to replace them every year or every two years. The machine costs $90,000 to buy, and TRS has a cost of capital of 10%. The following additional information has been gathered: Year 1 Year 2 Running costs $40,000 $50,000 Resale value when sold $65,000 $35,000 Which answer choice defines when TRS should replace their cutting machines, and what the saving will be? A. After one year, saving $6,000 per year. B. After one year, saving $12,000 per year. C. After two years, saving $6,000 per year. D. After two years, saving $12,000 per year.
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Calculus For Business, Economics And The Social And Life Sciences
Authors: Laurence Hoffmann, Gerald Bradley, David Sobecki, Michael Price
11th Brief Edition
978-0073532387, 007353238X
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