Question: 82. A current machine was purchased 3 years ago for $150,000. The book value is currently $90,000. The market value is $75,000. Straight-line depreciation is
82. A current machine was purchased 3 years ago for $150,000. The book value is currently $90,000. The market value is $75,000. Straight-line depreciation is used. The machine has 5 more years of service remaining with salvage of $10,000 at that time. Operating costs are $20,000 per year. A new piece of equipment can be purchased for $175,000 having a 12-year life with no salvage at that time. The annual operating costs are expected to be $12,000. If the desired ROI is 12%, determine the future annual costs of the existing and the new equipment. a) $38,904 and $41,300 b) $40,251 and $41,300 c) $38,904 and $39,232 d) $39,232 and S40,251
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