Instructions:

Write a paragraph that includes the concepts displayed below. Use the Example Numbers to illustrate your points. Explain in detail each point.

After submitting your writing, respond to two (2) other students. Discuss how you agree or disagree in a respectful manner. If you disagree explain how you would proceed.

Your writing and responses can be in English or Spanish.

Example Numbers:

Old Machine

n	Repair Value	Salvage Value	O&M	CR(10%)	OC(10%)	AEC(10%)
0	$1,200	$5,000
1		$4,000	$2,000	$2,420	$2,000	$4,420
2		$3,000	$3,500	$2,144	$2,714	$4,858
3		$2,000	$5,000	$1,889	$3,405	$5,294
4		$1,000	$6,500	$1,740	$4,072	$5,812
5		$0	$8,000	$1,636	$4,715	$6,351

New Machine

n	Market Value	O&M	CR(10%)	OC(10%)	AEC(10%)
0	$6,000
1	$5,100	$2,000	$5,900	$2,000	$7,900
2	$4,335	$2,800	$3,698	$2,381	$6,079
3	$3,685	$3,600	$2,908	$2,749	$5,657
4	$3,132	$4,400	$2,480	$3,105	$5,585
5	$2,662	$5,200	$2,202	$3,448	$5,650

Concepts to include:

How to decide if replacement takes places now.

How to use marginal analysis to decide when to replace.

Answer rating: 100% (QA)

The decision of when to replace an old machine with a new machine can be a difficult one To make the most effective decision it is important to use ma... View the full answer