Hoboken Cola, a local soda maker, is evaluating whether to buy a new seltzer maker. The...

 

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Hoboken Cola, a local soda maker, is evaluating whether to buy a new seltzer maker. The initial cost of the new machine is $18,000, and the interest rate is 12%. The machine's end-of-year salvage values over the next 5 years are presented in the table below. a) Calculate the marginal cost for the machine.| Salvage Value at EOY Loss in Market Value Interest Rate Interest Marginal Costs 0 $18,000 1 $14,000 2 $10,000 3 $9,500 4 $8,500 5 $5,100 b) What is the economic life of the machine? Why? Hoboken Cola, a local soda maker, is evaluating whether to buy a new seltzer maker. The initial cost of the new machine is $18,000, and the interest rate is 12%. The machine's end-of-year salvage values over the next 5 years are presented in the table below. a) Calculate the marginal cost for the machine.| Salvage Value at EOY Loss in Market Value Interest Rate Interest Marginal Costs 0 $18,000 1 $14,000 2 $10,000 3 $9,500 4 $8,500 5 $5,100 b) What is the economic life of the machine? Why?