A company is considering replacing an old piece of industrial equipment to reduce operating and maintenance cost.
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A company is considering replacing an old piece of industrial equipment to reduce operating and maintenance cost. A new equipment is quoted at $195,000. After 10 years, the machine would have no value, but it would save as much as $30,000 in operating and maintenance cost. If the firm’s interest rate is 10%, is it worth buying the new equipment?
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