Question: Problem I: A crushing machine that is a basic component of a metal recycling operation is wearing out faster than expected. The machine was purchased

 Problem I: A crushing machine that is a basic component of

Problem I: A crushing machine that is a basic component of a metal recycling operation is wearing out faster than expected. The machine was purchased 2 years ago for $400,000. At that time, the buyer thought the machine would serve its needs for at least 5 years, at which time the machine would be sold to a smaller independent recycler for $80,000. Now, however, the company thinks the market value of the diminished machine is only $50,000. If it is kept, the machine's operating cost will be $37,000 per year for the next 2 years, after which it will be scrapped for $1000. If it is kept for only 1 year, the market value is estimated to be $10,000. Alternatively, the company can outsource the process how for a fixed cost of $56,000 per year. At an interest rate of 10% per year, should the ompany continue with the current machine or outsource the process

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