Question: efficient X Company must decide whether to continue using its current equipment or replace it with new, more equipment. The following information is available for
efficient X Company must decide whether to continue using its current equipment or replace it with new, more equipment. The following information is available for the current and new equipment Current equipment $5,000 Current sales value Final sales value Operating costs 6,500 66,000 New equipment Purchase cost Final sales value Operating cost savings $50,000 6,500 9,000 Maintenance work will be necessary on the new equipment in Year 4, coating $3,000. The current equipment will last for value more years, the life ofthe new equipment is also five years. Assuming of replacing the current equipment? a discount rate of 7%, what is the net present 10. AOS-10,389 BO S-15,004 cO $-21,843 DO S-31,672 EO -45,925 FO $-66,591
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