Question: A company is considering replacing a machine that was bought six years ago for $50,000. The machine, however, can be repaired and its life extended

A company is considering replacing a machine that was bought six years ago for $50,000. The machine, however, can be repaired and its life extended by five more years. If the current machine is replaced, the new machine will cost $44,000 and will reduce the operating expenses by $6,000 per year. The seller of the new machine has offered a trade-in allowance of $15,000 for the old machine. If MARR is 12% per year before taxes, how much can the company spend to repair the existing machine? Choose the closest answer.

(a) $22,371

(b) $50,628

(d)−$1,000

Step by Step Solution

★★★★★

3.32 Rating (161 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Let X repair cost for existing mac... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Engineering Economy Questions!

Flint Tooling Company is considering replacing a machine that has been used in its factory for two years. Relevant data associated with the operations of the old machine and the new machine, neither...

Golden Printing Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of the old machine and the new machine,...

9-33. A company is considering replacing a machine that was bought six years ago for $50,000. The machine, however, can be repaired and its life extended by five more years. If the current machine is...

A company is considering replacing a machine that was bought six years ago for $60,000. The machine, however, can be repaired and its life extended by five more years. If the current machine is...

A company is considering replacing a machine that was bought six years ago for $45,000. The machine, however, can be repaired and its life extended five more years. If the current machine is...

Please include steps of how to get answer A company is considering replacing a machine that was bought five years ago for $48,000. The machine, however, can be repaired and its life extended five...

A company is considering replacing a machine that was bought five years ago for $50,000. The?machine, however, can be repaired and its life extended four more years. If the current machine...

Tim recently graduated from federation university and joined his family business. After reviewing the financial statements, Tim identified a significant increase in overhead costs, and in a further...

Investigate the velocity potential φ = Kxy, K = constant. Sketch the potential lines in the full xy plane, find any stagnation points, and sketch in by eye the orthogonal streamlines. What could...

Determine the x, y, z components of reaction at the pin A and the tension in the cable BC necessary for equilibrium of the rod. Given: F = 350 lb e = 12 ft a = 4 ftf = 4 ft b = 5 ft g = 10 ft c = 4...

At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $ 7 6 0 . During the year, accounts totaling $ 7 4 0 are written off as uncollectible. The end - of - year...

_____________ inflation occurs when the price level rises as a result of an increase in aggregate demand.

An assistant to Stacy gave her the PW values for four alternatives they are comparing for the development of a remote control vibration control system for offshore platform application. The results...

An industrial engineer is considering two robots for purchase by a fiber-optic manufacturing company. Robot X will have a first cost of $80,000, an annual maintenance and operation (M&O) cost of...

Two processes can be used for producing a polymer that reduces friction loss in engines. Process T will have a first cost of $750,000, an operating cost of $60,000 per year, and a salvage value of...

QUESTION 47 A firm's common stock currently sells for $40 per share. The firm recently paid a dividend of $2 per share on its common stock, and investors expect the dividend to grow indefinitely at a...

A bond is currently priced at $900 on a par value of $1,000. Its term to maturity is 10 years and its coupon rate is 8% (stated annually, paid semiannually). If you buy the bond, and hold it to...

LSU Corp. purchased Canadian dollar call options for speculative purposes. If these options are exercised, LSU will immediately sell the Canadian dollars in the spot market. Each option was purchased...