XYZ Company is considering replacing a machine. The new improved machine will cost $16,500 including installation;...
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XYZ Company is considering replacing a machine. The new improved machine will cost $16,500 including installation; it will have an estimated service life of 11 years and $2,000 salvage value. It is estimated that operating costs will average $1,550 per year. The present machine was purchased for $18,500 four years ago, and is estimated to have 11 more years of service life, at the end of which its salvage value will be $2,500. Operating costs of the present machine are $2,000 per year. If replaced now, it can be sold for $4,500. Tax is at 26% Using a MARR of 15% and present value analysis, determine whether to replace the existing machine on economic grounds. Use excel for analysis and attach file as embedded file in word document/ upload file in Moodle for your analysis. XYZ Company is considering replacing a machine. The new improved machine will cost $16,500 including installation; it will have an estimated service life of 11 years and $2,000 salvage value. It is estimated that operating costs will average $1,550 per year. The present machine was purchased for $18,500 four years ago, and is estimated to have 11 more years of service life, at the end of which its salvage value will be $2,500. Operating costs of the present machine are $2,000 per year. If replaced now, it can be sold for $4,500. Tax is at 26% Using a MARR of 15% and present value analysis, determine whether to replace the existing machine on economic grounds. Use excel for analysis and attach file as embedded file in word document/ upload file in Moodle for your analysis.
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Related Book For
Project Management A Systems Approach to Planning Scheduling and Controlling
ISBN: 978-0470278703
10th Edition
Authors: Harold Kerzner
Posted Date:
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