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XYZ manufacturing company has some existing semiautomatic production equipment that is considering replacing. This old equipment yearly maintenance cost today is $900 and will be
XYZ manufacturing company has some existing semiautomatic production equipment that is considering replacing. This old equipment yearly maintenance cost today is $900 and will be increasing by $100 per year thereafter. This old equipment has a present MV of $ 6,000 with more year left of its useful life and at EOY 5 it will have a negligible market value. XYZ Company can replace the old equipment with a new one, the purchasing price of the new equipment is $11,000 and its maintenance cost is $150 for the first year and het maintenance for this new equipment will increase at a 2% per year thereafter. The new equipment has a life a of 5 years and at EOY 5 it will have a MV of $3,000. XYX Company has a MARR before the old equipment or should it purchase the new equipment
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