TRS uses cutting machines in its manufacturing processes and must decide whether to replace them every...

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TRS uses cutting machines in its manufacturing processes and must decide whether to replace them every year or every two years. The machine costs $90,000 to buy, and TRS has a cost of capital of 10%. The following additional information has been gathered: Year 1 Year 2 Running costs $40,000 $50,000 Resale value when sold $65,000 $35,000 Which answer choice defines when TRS should replace their cutting machines, and what the saving will be? A. After one year, saving $6,000 per year. B. After one year, saving $12,000 per year. C. After two years, saving $6,000 per year. D. After two years, saving $12,000 per year. TRS uses cutting machines in its manufacturing processes and must decide whether to replace them every year or every two years. The machine costs $90,000 to buy, and TRS has a cost of capital of 10%. The following additional information has been gathered: Year 1 Year 2 Running costs $40,000 $50,000 Resale value when sold $65,000 $35,000 Which answer choice defines when TRS should replace their cutting machines, and what the saving will be? A. After one year, saving $6,000 per year. B. After one year, saving $12,000 per year. C. After two years, saving $6,000 per year. D. After two years, saving $12,000 per year.

Answer rating: 100% (QA)

Solution I Machine is replaced each year year PVE 10k ... View the full answer