Q17.3

A firm is considering replacing a machine that has been used to make a certain kind of packaging material. The new, improved machine will cost $31,000 installed and will have an estimated economic life of 10 years, with a salvage value of $2,500. Operating cost are expected to be $1,000 per year throughout the service life of the machine. The old machine (still in use) had an orginal cost of $25,000 four years ago, and at the time it was purchased, its service life was estimated to be seven years, with a salvage value of $5,000. The old machine, its updated market values and operating costs for the next four years is as follows:(Please show work)(please Use excel)

				Operating
	Year	MV	BV	Costs
	0	$7,700	$7,889
	1	$4,300	$5,578	$3,200
	2	$3,300	$3,347	$3,700
	3	$1,100	$1,116	$4,800
	4	$0	$0	$5,850

The firm's MARR is 12%. What is the minimum EUAC?

	a.	$6,435
	b.	$6,720
	c.	$6,796
	d.	$7,524