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Your division is considering the purchase of a Cramit packaging machine for $200,000.You project that the operating and maintenance costs (OMC) will be $50,000 this
Your division is considering the purchase of a Cramit packaging machine for $200,000.You project that the operating and maintenance costs (OMC) will be $50,000 this year and that they will increase by $20,000 per year. The salvage value is expected to be $150,000 at any time you sell the machine for the next several years. Your MARR is 10%. What is the optimum economic life you predict for the machine? Your old packaging machine will have a EUAC of $128,000, if you keep it for its optimum economic life. Should you buy the Cramit?
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