Question: Machine X has been used for 10 years and currently has a book value of $20,000. a decision must be made concerning the most economic

 Machine X has been used for 10 years and currently has

Machine X has been used for 10 years and currently has a book value of $20,000. a decision must be made concerning the most economic action to take: keep X, replace X with Y or replace X with Z. A before-tax analysis is to be performed. If machine X is continued in service, it can be used for 6 years and scrapped at zero value. Annual operating and maintenance costs will equal to $95,000. If machine X is replaced with machine Y, a trade-in allowance of $25,000 will be provided for X. The original purchase price for Y, excluding the trade-in allowance, is $120.000. At the end of the 6 year planning horizon, Y will have a salvage value of 530.000. Annual operating and maintenance costs will total $80,000. If machine X is replaced with machine Z, no trade-in allowance will be provided for X. The purchase price for Z is $150,000. At the end of the 6-year planning horizon, Z will have a salvage value of $50,000. Annual operating and maintenance costs will total $60.000. Using a MARR of 15% and a before-tax analysis, determine the preferred course of action

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