Question: You are operating an old machine which costs $10,000 annually to operate and is functional for 4 more years. In order to replace it now

You are operating an old machine which costs $10,000 annually to operate and is functional for 4 more years. In order to replace it now with a new machine, what should be the maximum cost of buying this new machine which has a life of 4 years and costs only $4,000 annually to operate? The opportunity cost of capital is 11%.

  • $18,614.67

  • $15,209.84

  • $14,410.99

  • $10,338.56

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