You operate a car workshop and you have used the current machine 1-1000 for almost 7...
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You operate a car workshop and you have used the current machine "1-1000" for almost 7 years. The machine is working slowly and therefore you would like to consider the replacement of the existing machine. After conducting research, you find the model "P-2000" suitable for your business. The information regarding two different models is given below: Machine Costs Annual cash flow Remaining Life Residual value now 1-1000 2 million 400,000 3 years 400,000 Residual value in 3 years 100,000 Machine Costs Annual cash flow Estimate life Residual value after 8 years of operation You are considering the following alternatives: 1. Replace the model "I-1000" with "P-2000" now 2. Replace the model "I-1000" with "P-2000" in 3 years' time P-2000 3 million 750,000 8 years 600,000 Suppose the required rate of return is 15% p.a., please advise which alternative the petrol station should adopt. You operate a car workshop and you have used the current machine "1-1000" for almost 7 years. The machine is working slowly and therefore you would like to consider the replacement of the existing machine. After conducting research, you find the model "P-2000" suitable for your business. The information regarding two different models is given below: Machine Costs Annual cash flow Remaining Life Residual value now 1-1000 2 million 400,000 3 years 400,000 Residual value in 3 years 100,000 Machine Costs Annual cash flow Estimate life Residual value after 8 years of operation You are considering the following alternatives: 1. Replace the model "I-1000" with "P-2000" now 2. Replace the model "I-1000" with "P-2000" in 3 years' time P-2000 3 million 750,000 8 years 600,000 Suppose the required rate of return is 15% p.a., please advise which alternative the petrol station should adopt.
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Determine which alternative the car workshop should adopt Replace the model I1000 with P2000 now Cas... View the full answer
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Data Modeling and Database Design
ISBN: 978-1285085258
2nd edition
Authors: Narayan S. Umanath, Richard W. Scammel
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