A company that manufactures amplified pressure transducers is trying to decide between a dualspeed and a variable speed machine The engineers are not sure about the salvage value of the variable speed machine, so they have asked several different used equipment dealers for estimates The results can...

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A company that manufactures amplified pressure transducers is trying to decide between a dualspeed and a variable-speed

Question:

A company that manufactures amplified pressure transducers is trying to decide between a dualspeed and a variable-speed machine. The engineers are not sure about the of the variable-speed machine, so they have asked several different used-equipment dealers for estimates. The results can be summarized as follows: there is a 32% chance of getting $20,000, a 45% chance of getting $28,000, and a 13% chance of getting $34,000. Also, there is a 10% chance that the company may have to pay $5000 to dispose of the equipment. Calculate the expected .

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...