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Would you first explain what to do with the sixth year depreciation value, based on the fact that the useful life is five years? It
Would you first explain what to do with the sixth year depreciation value, based on the fact that the useful life is five years? It is important. I have already constructed the BTCF, but I confused with depreciation values:
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Problem 7-24 (algorithmic) Three products will be manufactured in a new facility at the Apex Manufacturing Company. They each require an identical manufacturing operation, but different production times, on a broaching machine. Two alternative types of broaching machines (M1 and M2) are being considered for purchase. One machine type must be selected. For the same level of annual demand for the three products, annual production requirements (machine hours) and annual operating expenses (per machine) are listed on the right Show Work Question Help Product Machine M1 Machine M2 ABC 450 hr 800 h 1.150 hr MNQ 1.850 hr 2.650 hr 2.300 h STV 4,250 hr 5.950 hr Capital investment S16,000 per machine $23,000 per machine Expected life five years eight years Annual expenses $4,000 per machine $6.500 per machine
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