Question: Please provide step by step instructions for how the problem was solved. National Chemicals has an automatic chemical mixture that it has been using for

Please provide step by step instructions for how the problem was solved.

National Chemicals has an automatic chemical mixture that it has been using for the past 4 years. The mixer originally cost $18000. Today the mixer can be sold for $10000. The mixer can be used for 10 years more and will have a salvage value of $2500 at that time. The annual operating and maintenance costs for the mixer equal $6000/year. Because of an increase in business, a new mixer must be purchased. If an older mixer is retained, a new mixer will be purchased at a cost of $25000 and have a $4000 salvage value in 10 years. This new mixer will have an annual operating and maintenance costs equal to $5000/year. The old mixer can be sold and a mixer of larger capacity can be purchased for $32000. This mixer will have a $6000 salvage value in 10 years and will have annual operating and maintenance costs equal to $8000/year.

Based on a MARR of 15% and using a cash flow approach, what do you recommend?

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