An engineer calculated the AW values shown for retaining a presently owned machine additional years. A...
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An engineer calculated the AW values shown for retaining a presently owned machine additional years. A challenger has an ESL of 7 years with AW = $-26,000 per year. Assuming all future costs remain the same, when should the company replace the defender? The MARR is 12% per year. Assume used machines like the one presently owned will always be available. AW of the Challenger, $ -136,000 -126,000 -92,000 Years Retained AW of Defender, $ -145,000 -96,000 -63,000 -39,000 -49,000 4 -53,000 -38,000 a) Now b) after year 1 c) after year 4 d) after year 5 An engineer calculated the AW values shown for retaining a presently owned machine additional years. A challenger has an ESL of 7 years with AW = $-26,000 per year. Assuming all future costs remain the same, when should the company replace the defender? The MARR is 12% per year. Assume used machines like the one presently owned will always be available. AW of the Challenger, $ -136,000 -126,000 -92,000 Years Retained AW of Defender, $ -145,000 -96,000 -63,000 -39,000 -49,000 4 -53,000 -38,000 a) Now b) after year 1 c) after year 4 d) after year 5
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