With the estimates shown below, Sarah needs to determine the trade in (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 13 per year Determine the replacement value Machine X Machine Y Market Value, $ 82,000 Annual Cost, $ per Year 55,500 40,000 for year 1,increasing by 2000 per year thereafter Salvage Value 12,500 19,000 Life, Years 3 5 The replacement value is $

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Question: With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to that of

With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 13% per year. Determine the replacement value.

	Machine X	Machine Y
Market Value, $	?	82,000
Annual Cost, $ per Year	55,500	40,000 for year 1,increasing by 2000 per year thereafter.
Salvage Value	12,500	19,000
Life, Years	3	5

The replacement value is $

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