Big-J Construction Company, Inc. (Big-J CC) is conducting routine periodic review of existing field equipment. The owner of Big-J CC has asked for a replacement evaluation of a paving machine now in use. A newer, more efficient machine is being considered. The old machine was purchased 3 years ago for $200,000, and yearly operating and maintenance costs are as follows. Big-J CC Uses a MARR of 20%; the current market value of the paver is $120,000.
Estimates of Operating &Maintenance Cost and Market Value for Next 7 Years (old paver)

Data for the new paving machine have been analyzed. Its most economic life at 8 years with a minimum EUAC of $62,000. Make a recommendation to Big - J CC regarding the paving machine in question?

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Operating Maintenance Market Value Cost in Year n Cost in Year n If Sold in Year n Year, $15.000 15,000 17,000 20,000 25.000 30,000 35,000 9,000 10,000 12,000 18,000 20,000 25,000 30,000 $85,000 65.000 50,000 40,000 35,000 30,000 25,000