Four years ago, your company upgraded its IT infrastructure at a cost of $50,000. Its current salvage
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Question:
Four years ago, your company upgraded its IT infrastructure at a cost of $50,000. Its current salvage value is $25,000. The salvage value will decline to $20,000, $15,000, $12,500, and $10,000 over the next four years. The O&M costs will be $5,000 this year and increase by $2,000 per year. Your company’s interest rate is 10%. The best challenger for replacing the IT infrastructure is $15,000. When should the communications system be replaced?
Expert Answer:
soln Let us construct the Annual Equivalent Total Cost for the existing system All amounts i... View the full answer
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